UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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| Item 1.01. | Entry into a Material Definitive Agreement. |
First Lien Credit Facility and Senior Notes Transactions
CURO Group Holdings Corp. (the “Company”) previously announced on May 10, 2023, that it had substantially finalized agreements with certain existing holders (the “Holders”) of the Company’s outstanding 7.500% Senior Secured Notes due 2028 (the “Existing Notes”) to enter into a new first lien credit facility. In addition to agreeing to extend first lien term loans (the “Term Loans”) under the new facility, the Holders also agreed to exchange Existing Notes held by such Holders for new 7.500% Senior 1.5 Lien Secured Notes due 2028 of the Company (the “New Notes”) (the foregoing transactions collectively, the “Transactions”). Definitive documentation in connection with the Transactions, as further described below, were executed, and the Transactions closed on May 15, 2023 (the “Closing Date”).
First Lien Credit Agreement
On the Closing Date, the Company, as borrower, certain of the Company’s subsidiaries, as guarantors (the “Guarantors”), the Holders, as lenders (in such capacity, the “Lenders”), and Alter Domus (US) LLC, as administrative agent and collateral agent (the “First Lien Agent”), entered into that certain First Lien Credit Agreement (the “Credit Agreement”), pursuant to which the Lenders have made credit extensions of $150,000,000 in the form of Term Loans to the Company, subject to the terms and conditions of the Credit Agreement.
The Term Loans are senior secured obligations of the Company and rank effectively senior in right of payment to all of its existing and future unsecured senior debt, to the extent the value of the collateral pledged under the First Lien Security Agreement (as defined below), First Lien Pledge Agreement (as defined below) and related collateral arrangements, senior in right of payment to all of its existing and future subordinated debt and effectively junior in right of payment to all of its existing and future secured debt of senior lien priority, to the extent of the value of the collateral therefor.
The Term Loans are guaranteed by each of the Company’s existing and future domestic subsidiaries (other than CURO SPV (as defined below)) that are not receivables financing entities and will be guaranteed by each of its foreign subsidiaries, if any, that guarantees any indebtedness of the Company or the Guarantors. The Term Loans are secured by first priority liens on substantially all of the Company’s and the Guarantors’ assets (including a pledge of equity interests held by the Company and the Guarantors in their direct subsidiaries), pursuant to that certain Security Agreement, dated as of the Closing Date (the “First Lien Security Agreement”) by and among the Company, each Guarantor and the First Lien Agent, and that certain Pledge Agreement (the “First Lien Pledge Agreement”), dated as of the Closing Date, by and among the Company, each Guarantor and the First Lien Agent.
The Term Loans will mature on August 2, 2027. Interest on the Term Loans will accrue at a rate of 18.00% per annum and be payable on March 31, June 30, September 30, and December 31 of each year. The Company may elect to pay up to up to 12.00% per annum in kind during the first year following the Closing Date and up to 9.00% per annum in kind thereafter. The proceeds of the Term Loans will be used to repay in full the Prior Credit Agreement (as defined below), for general corporate purposes and for payment of fees and expenses relating to the Transactions.
The Credit Agreement contains customary covenants that restrict, subject to specified exceptions, the ability of the Company, the Guarantors and their subsidiaries to, among other things: (i) sell assets and subsidiary equity; (ii) incur or redeem indebtedness; (iii) create or incur certain liens; (iv) enter into affiliate agreements; (v) pay dividends, (vi) change the nature of their business or operations, (vii) make certain types of investments, (ix) enter into agreements that restrict distributions from certain subsidiaries; and (x) consolidate, merge or transfer all or substantially all of the assets of the Company or any subsidiary. The covenants in the Credit Agreement are subject to important exceptions and qualifications.
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The Credit Agreement includes certain financial and operating covenants, including covenants requiring the Company to (i) maintain liquidity as of the last day of each calendar month, beginning May 31, 2023, of (a) prior to September 30, 2024, equal to or greater than $75,000,000 and (b) on and after September 30, 2024, equal to or greater than $60,000,000 and (ii) maintain Minimum Adjusted Pre-Tax Income in accordance with the levels set forth in the definition thereof for each four-Fiscal-Quarter period, beginning with the period ending on March 31, 2024.
The Credit Agreement contains customary events of default, which include (subject in certain cases to customary grace and cure periods), among others, non-payment of principal or interest, breach of other covenants or agreements in the Credit Agreement, the failure to pay the principal at maturity of certain other indebtedness or defaults under certain other indebtedness and certain events of bankruptcy and insolvency.
Of the $150,000,000 aggregate principal amount of Term Loans provided under the Credit Agreement, a portion equal to an aggregate principal amount of $16,380,000 was funded by Curo SPV, LLC (the “CURO SPV”), a wholly-owned special purpose vehicle of the Company (the “SPV Loans”), using proceeds from a concurrent private placement issuance of 18.00% Senior Secured Notes by the CURO SPV (the “Backstop Notes”) to certain Holders. The Backstop Notes are guaranteed by the Company and are secured by the SPV Loans. The Company’s guarantee of the Backstop Notes is contractually subordinated to its obligations as borrower under the Term Loans. The Backstop Notes will automatically mature on the date on which the Term Loans mature. Interest on the Backstop Notes will accrue at a rate of 18.00% per annum and be payable on March 31, June 30, September 30, and December 31 of each year. Interest on the Backstop Notes will be paid in cash or in kind, consistent with the manner in which the Company elects to pay interest on the Term Loans. The Backstop Notes are subject to customary covenants that restrict, subject to specified exceptions, the ability of the CURO SPV to (i) sell assets; (ii) incur or redeem indebtedness; (iii) create or incur liens other than liens granted to the Holders holding the Backstop Notes; (iv) pay dividends; (v) change the nature of its business or operations; (vi) make certain types of investments, (vii) consolidate, merge or transfer all or substantially all of the assets of the CURO SPV. The Backstop Notes contain customary events of default, which include (subject in certain cases to customary grace and cure periods), among others, non-payment of principal or interest, any events of default under the Credit Agreement or the disposal of collateral securing the Backstop Notes.
The foregoing description of the Credit Agreement, the First Lien Security Agreement and the First Lien Pledge Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Credit Agreement, First Lien Security Agreement and the First Lien Pledge Agreement, which are filed herewith as exhibits to this Current Report on Form 8-K and are incorporated by reference herein.
Exchange Agreement
On the Closing Date, the Company, the Guarantors and the Holders entered into an exchange agreement (the “Exchange Agreement”), pursuant to which the Holders agreed to exchange $682,298,000 aggregate principal amount, or approximately 68.2%, of the Company’s Existing Notes for $682,298,000 aggregate principal amount of the Company’s New Notes. The exchange of the Existing Notes for the New Notes (the “Exchange Transaction”) was consummated on the Closing Date, following the effectiveness of the Supplemental Indenture (as defined below).
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Pursuant to the terms of the Exchange Agreement, each Holder received for each $1,000 aggregate principal amount of the Existing Notes validly exchanged by such Holder, $1,000 aggregate principal amount of New Notes issued by the Company.
The New Notes were sold pursuant to the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended. The Company did not receive any cash proceeds from the issuance of the New Notes issued in the Exchange Transaction.
The foregoing description of the Exchange Agreement and the Transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, full text of the Exchange Agreement, attached hereto as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
1.5 Lien Notes and Indenture
At the Closing Date, in connection with the consummation of the Exchange Transaction, the Company issued $682,298,000 in aggregate principal amount of New Notes pursuant to that certain Indenture, dated the Closing Date (the “Indenture”), among the Company, the Guarantors and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the “Trustee”).
The New Notes are senior secured obligations of the Company and rank effectively senior in right of payment to all of its existing and future unsecured senior debt, to the extent of the value of the collateral pledged under the Indenture and related collateral arrangements, senior in right of payment to all of its existing and future subordinated debt and effectively junior in right of payment to all of its existing and future secured debt of senior lien priority, to the extent of the value of the collateral therefor.
The New Notes are guaranteed by each of the Company’s existing and future domestic subsidiaries (other than CURO SPV) that are not receivables financing entities and will be guaranteed by each of its foreign subsidiaries, if any, that guarantees any indebtedness of the Company or the Guarantors. The New Notes are secured by 1.5 priority liens on substantially all of the Company’s and the Guarantors’ assets (including a pledge of equity interests held by the Company and the Guarantors in their direct subsidiaries), pursuant to a security agreement (the “1.5 Lien Security Agreement”) and a pledge agreement (the “1.5 Lien Pledge Agreement”), dated the Closing Date, by and among the Company and the Guarantors in favor of U.S. Bank Trust Company, National Association, as collateral agent under the Indenture, subject to certain exceptions and permitted liens; provided, however, that, the liens securing the New Notes are contractually subordinated to the liens that secure the indebtedness under the Credit Agreement, pursuant to terms of that certain intercreditor agreement (the “Senior Intercreditor Agreement”) by and among the First Lien Agent, the Trustee and TMI Trust Company (the “Existing Trustee”), as collateral agent under the indenture, dated July 30, 2021, by and among the Company, the guarantors party thereto and the Existing Trustee, governing the Existing Notes; provided, further, that the liens securing the New Notes are contractually senior to the liens that secure the Existing Notes, pursuant to the terms of that certain intercreditor agreement (the “Junior Intercreditor Agreement”), dated the Closing Date, by and among the Company, the Trustee and Existing Trustee.
The New Notes will mature on August 1, 2028. Interest on the New Notes will accrue at a rate of 7.500% per annum, payable on February 1 and August 1 of each year, commencing on August 1, 2023.
4
Prior to August 1, 2024, the Company may redeem up to 10% of the aggregate principal amount of the New Notes during each 12-month period following the Closing Date at a redemption price of 103% of the principal amount of the New Notes, plus accrued and unpaid interest, if any, to the applicable redemption date. Additionally, at any time prior to August 1, 2024, the Company may redeem (i) up to 40% of the aggregate principal amount of the New Notes at a price equal to 107.500% of the principal amount of the New Notes, plus accrued and unpaid interest, if any, to the applicable redemption date with the net proceeds of certain equity offerings; and (ii) some or all of the New Notes at a make-whole price. On or after August 1, 2024, the Company may redeem some or all of the New Notes at a premium that will decrease over time, plus accrued and unpaid interest, if any, to the applicable date of redemption. The redemption price for the New Notes if redeemed during the 12 months beginning (i) August 1, 2024 is 103.750%, (ii) August 1, 2025 is 101.875% and (iii) August 1, 2026 and thereafter is 100.000%.
The Indenture contains customary covenants that restrict, subject to specified exceptions, the ability of the Company and the Guarantors and certain of its subsidiaries to, among other things: (i) sell assets and subsidiary equity; (ii) incur or redeem indebtedness; (iii) create or incur certain liens; (iv) enter into affiliate agreements; (v) pay cash dividends, (vi) change the nature of its business or operations, (vii) make certain types of investments, (ix) enter into agreements that restrict distributions from certain restricted subsidiaries; and (x) consolidate, merge or transfer all or substantially all of the assets of the Company or any restricted subsidiary. The Indenture also contains certain financial and operating covenants substantially similar to the financial and operating covenants contained in the Credit Agreement. The covenants in the Indenture are subject to important exceptions and qualifications.
The Indenture contains customary events of default, which include (subject in certain cases to customary grace and cure periods), among others, non-payment of principal or interest, breach of other covenants or agreements in the Indenture, the failure to pay the principal at maturity of certain other indebtedness or the acceleration of certain other indebtedness and certain events of bankruptcy and insolvency.
The foregoing description of the Indenture, the 1.5 Lien Security Agreement, the 1.5 Lien Pledge Agreement, the Senior Intercreditor Agreement and the Junior Intercreditor Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Indenture, the 1.5 Lien Security Agreement, the 1.5 Lien Pledge Agreement, the Senior Intercreditor Agreement and the Junior Intercreditor Agreement, which are filed herewith as exhibits to this Current Report on Form 8-K and are incorporated by reference herein.
Supplemental Indenture
On the Closing Date, the Company entered into a Third Supplemental Indenture, by and among the Company, the Guarantors and the Existing Trustee (the “Supplemental Indenture”), which amends the Existing Indenture to, among other things, eliminate or amend substantially all of the restrictive covenants contained in the Existing Indenture governing the Existing Notes, other than those relating to the payment of principal and interest, and to authorize the Existing Trustee to enter into the Senior Intercreditor Agreement and the Junior Intercreditor Agreement. The Supplemental Indenture is binding on all Existing Notes that remain outstanding.
The foregoing description of the Supplemental Indenture does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Supplemental Indenture, which is filed as an exhibit to this Current Report on Form 8-K and is incorporated by reference herein.
Canada SPV Facility Transactions
On May 10, 2023, the Company previously announced that it had substantially finalized a revolving credit facility (the “Canada SPV Facility”) and definitive documentation related thereto, as further described below. The Canada SPV Facility and definitive documentation in connection with the Canada SPV Facility was executed and closed on May 12, 2023 (the “SPV Facility Closing Date”).
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On the SPV Facility Closing Date, CURO Canada Receivables II Limited Partnership, a newly created, bankruptcy-remote special purpose vehicle and an indirect wholly-owned subsidiary of the Company (the “Canada SPV Borrower”), entered into the Canada SPV Facility with Midtown Madison Management LLC (the “Agent”), as administrative agent, and the lenders party thereto (the “Canada SPV Lenders”), that provides for C$110.0 million of initial borrowing capacity.
The Canada SPV Facility is secured by a first lien against all assets of the Canada SPV Borrower, which is a special purpose vehicle into which certain eligible receivables originated by our operating entities in Canada are sold pursuant to the Sale and Servicing Agreement (as defined below). The Canada SPV Lenders advance to the Canada SPV Borrower 80% of the principal balance of the eligible installment loans sold to the Canada SPV Borrower. The advance rate is subject to increase or decrease under certain circumstances. As customer loan payments flow into the Canada SPV Borrower, such payments are subjected to a conventional priority-of-payment waterfall that, absent a default or certain other trigger events, applies available collections to interest, fees, expenses and any borrowing base shortfall before being released to the Canada SPV Borrower. Borrowings under the Canada SPV Facility bear interest at an annual rate of three-month CDOR plus 8.00% per annum, subject to increase or decrease under certain circumstances. The Canada SPV Borrower also pays a commitment fee on the unused portion of the commitments and an original issue discount on the amount of (i) the initial advance under the Canada SPV Facility and (ii) the first advance following any increase in the aggregate commitments thereunder.
The Canada SPV Facility contains various conditions to borrowing and affirmative, negative and financial maintenance covenants. The Canada SPV Facility also contains various events of default, the occurrence of which could result in termination of the Canada SPV Lenders’ commitments to lend and the acceleration of all obligations of the Canada SPV Borrower under the Canada SPV Facility. This facility matures in 2025.
Pursuant to the Guaranty entered into by the Company on the SPV Facility Closing Date (the “Guaranty”) in connection with the Canada SPV Facility, the Company is providing the Canada SPV Lenders with a recourse indemnity.
In connection with the Canada SPV Facility, the Canada SPV Borrower also entered into a Sale and Servicing Agreement (the “Sale and Servicing Agreement”), with CURO Canada Corp. (“CURO Canada”), and LendDirect Corp. (“LendDirect”), pursuant to which CURO Canada and LendDirect will sell, on a fully serviced basis, certain eligible receivables and related rights and collections to the Canada SPV Borrower.
In connection with the Canada SPV Facility, the Canada SPV Borrower entered into a General Security Agreement with the Agent, to serve as security in favor of the Agent for the payment and performance of the Canada SPV Borrower’s obligations under the Canada SPV Facility and other related loan documents to which it is a party.
In connection with the Canada SPV Facility and that certain Second Amended and Restated Credit Agreement, dated as of November 12, 2021, among, inter alios, CURO Canada Receivables Limited Partnership, as borrower, (the “CURO-Waterfall SPV Borrower”), Waterfall Asset Management, LLC, as administrative agent (in such capacity, the “Waterfall Agent”) and the lender party thereto (the “Waterfall Lender”), as amended, restated, supplemented or otherwise modified from time to time (the “Waterfall Facility”), the Agent, the Canada SPV Lenders, the Canada SPV Borrower, the CURO-Waterfall SPV Borrower, the Waterfall Agent, the Waterfall Lender, CURO Canada and LendDirect have entered into an Intercreditor Agreement on the SPV Facility Closing Date (the “Canada Intercreditor Agreement”) pursuant to which, among other things, certain security interests granted to the Canada SPV Borrower and the CURO-Waterfall SPV Borrower by CURO Canada and LendDirect, and the corresponding sub-liens of the Agent and the Waterfall Agent, shall be accorded equal priority and rank and be enforceable pari passu for all purposes at all times.
6
The foregoing descriptions of the Canada SPV Facility, the Guaranty, the Sale and Servicing Agreement and the Canada Intercreditor Agreement do not purport to be complete and are subject to, and qualified in their entirety by reference to, the full text of the Canada SPV Facility, the Guaranty, the Sale and Servicing Agreement and the Canada Intercreditor Agreement, which are filed herewith as exhibits to this Current Report on Form 8-K and are incorporated by reference herein.
Certain Amendments to SPV Credit Facilities
On the Closing Date, the Company also amended certain of its SPV credit facilities. These amendments made various changes to the SPV credit facilities, including, in certain cases, with respect to advance rates and maturity dates. With these amendments, the Company no longer needs to extend its previous waivers to certain financial ratios, covenants and other requirements in its debt agreements.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The relevant information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
| Item 9.01. | Financial Statements and Exhibits. |
(d). Exhibits
7
8
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on this 16th day of May, 2023.
| CURO Group Holdings Corp. | ||
| By: | /s/ Ismail Dawood | |
| Name: | Ismail Dawood | |
| Title: | Chief Financial Officer | |
9
Exhibit 4.1
EXECUTION VERSION
CURO Group Holdings Corp.
as the Issuer
and the Guarantors party hereto
$682,298,000
aggregate principal amount of
7.500% SENIOR 1.5 LIEN SECURED NOTES DUE 2028
INDENTURE
Dated as of May 15, 2023
U.S.
Bank Trust Company, National Association
as Trustee
and
Collateral Agent
Table of Contents
Page
|
ARTICLE 1 Definitions and Incorporation by Reference |
1 | |
| Section 1.01 | Definitions | 1 |
| Section 1.02 | Other Definitions | 31 |
| Section 1.03 | Incorporation by Reference of Trust Indenture Act | 32 |
| Section 1.04 | Rules of Construction | 32 |
| ARTICLE 2 The Notes | 33 | |
| Section 2.01 | Form and Dating | 33 |
| Section 2.02 | Execution and Authentication | 34 |
| Section 2.03 | Registrar and Paying Agent | 34 |
| Section 2.04 | Paying Agent to Hold Money in Trust | 35 |
| Section 2.05 | Holder Lists | 35 |
| Section 2.06 | Transfer and Exchange | 35 |
| Section 2.07 | Replacement Notes | 46 |
| Section 2.08 | Outstanding Notes | 47 |
| Section 2.09 | Treasury Notes | 47 |
| Section 2.10 | Temporary Notes | 48 |
| Section 2.11 | Cancellation | 48 |
| Section 2.12 | Defaulted Interest | 48 |
| Section 2.13 | CUSIP Numbers | 48 |
| Section 2.14 | Issuance of Additional Notes | 49 |
| ARTICLE 3 Redemption and Prepayment | 49 | |
| Section 3.01 | Notices to Trustee | 49 |
| Section 3.02 | Selection of Notes to be Redeemed | 49 |
| Section 3.03 | Notice of Redemption | 50 |
| Section 3.04 | Effect of Notice of Redemption | 51 |
| Section 3.05 | Deposit of Redemption Price | 51 |
| Section 3.06 | Notes Redeemed in Part | 52 |
| Section 3.07 | Optional Redemption | 52 |
| Section 3.08 | Mandatory Redemption | 53 |
| Section 3.09 | Offer to Purchase by Application of Excess Proceeds | 53 |
| Section 3.10 | [Reserved] | 55 |
| Section 3.11 | Company May Acquire Notes | 55 |
| ARTICLE 4 Satisfaction and Discharge | 55 | |
| Section 4.01 | Satisfaction and Discharge | 55 |
| Section 4.02 | Application of Trust Money | 56 |
| ARTICLE 5 Covenants | 56 | |
| Section 5.01 | Payment of Notes | 56 |
| Section 5.02 | Maintenance of Office or Agency | 56 |
| Section 5.03 | Reports | 57 |
| Section 5.04 | Compliance Certificate | 58 |
Table
of Contents
(continued)
Page
| Section 5.05 | Taxes | 58 |
| Section 5.06 | Stay, Extension and Usury Laws | 58 |
| Section 5.07 | Restricted Payments | 59 |
| Section 5.08 | Dividend and Other Payment Restrictions Affecting Subsidiaries | 61 |
| Section 5.09 | Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock | 63 |
| Section 5.10 | Asset Sales | 67 |
| Section 5.11 | Transactions with Affiliates | 69 |
| Section 5.12 | Liens | 70 |
| Section 5.13 | Corporate Existence; Maintenance of Property and Insurance | 70 |
| Section 5.14 | Offer to Repurchase Upon Change of Control | 71 |
| Section 5.15 | [Reserved] | 73 |
| Section 5.16 | [Reserved] | 73 |
| Section 5.17 | Additional Subsidiary Guarantees | 73 |
| Section 5.18 | Business Activities | 74 |
| Section 5.19 | [Reserved] | 74 |
| Section 5.20 | [Reserved] | 74 |
| Section 5.21 | Mortgages | 74 |
| Section 5.22 | Further Assurances | 75 |
| Section 5.23 | Loan SPV | 75 |
| Section 5.24 | Minimum Liquidity | 76 |
| Section 5.25 | Minimum Adjusted Pre-Tax Income | 76 |
| Section 5.26 | Operating Covenants | 76 |
| Section 5.27 | Post-Issuance Obligations | 77 |
| ARTICLE 6 Successors | 77 | |
| Section 6.01 | Merger, Consolidation or Sale of Assets | 77 |
| Section 6.02 | Successor Entity Substituted | 79 |
| ARTICLE 7 Defaults and Remedies | 80 | |
| Section 7.01 | Events of Default | 80 |
| Section 7.02 | Acceleration | 82 |
| Section 7.03 | Other Remedies | 83 |
| Section 7.04 | Waiver of Past Defaults | 83 |
| Section 7.05 | Control by Majority | 83 |
| Section 7.06 | Limitation on Suits | 84 |
| Section 7.07 | Rights of Holders To Receive Payment | 84 |
| Section 7.08 | Collection Suit By Trustee | 84 |
| Section 7.09 | Trustee May File Proofs of Claim | 85 |
| Section 7.10 | Priorities | 85 |
| Section 7.11 | Undertaking For Costs | 85 |
| Section 7.12 | Rights and Remedies Cumulative | 86 |
| Section 7.13 | Delay or Omission Not Waiver | 86 |
ii
Table
of Contents
(continued)
Page
| ARTICLE 8 Trustee | 86 | |
| Section 8.01 | Duties of Trustee | 86 |
| Section 8.02 | Rights of Trustee | 87 |
| Section 8.03 | Individual Rights of Trustee | 89 |
| Section 8.04 | Trustee’s Disclaimer | 89 |
| Section 8.05 | Notice of Defaults | 89 |
| Section 8.06 | [Reserved] | 90 |
| Section 8.07 | Compensation and Indemnity | 90 |
| Section 8.08 | Replacement of Trustee | 91 |
| Section 8.09 | Successor Trustee by Merger, Etc. | 92 |
| Section 8.10 | Eligibility, Disqualification | 92 |
| Section 8.11 | Preferential Collection of Claims Against Company | 92 |
| ARTICLE 9 Legal Defeasance and Covenant Defeasance | 92 | |
| Section 9.01 | Option to Effect Legal Defeasance or Covenant Defeasance | 92 |
| Section 9.02 | Legal Defeasance and Discharge | 92 |
| Section 9.03 | Covenant Defeasance | 93 |
| Section 9.04 | Conditions to Legal or Covenant Defeasance | 94 |
| Section 9.05 | Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions | 94 |
| Section 9.06 | Repayment to Company | 95 |
| Section 9.07 | Reinstatement | 95 |
| ARTICLE 10 Amendment, Supplement and Waiver | 96 | |
| Section 10.01 | Without Consent of Holders | 96 |
| Section 10.02 | With Consent of Holders | 97 |
| Section 10.03 | Revocation and Effect of Consents | 99 |
| Section 10.04 | Notation On or Exchange of Notes | 100 |
| Section 10.05 | Trustee or Collateral Agent to Sign Amendments, Etc. | 100 |
| ARTICLE 11 Guarantees | 100 | |
| Section 11.01 | Guarantees | 100 |
| Section 11.02 | Additional Guarantors | 101 |
| Section 11.03 | Releases of Guarantees | 102 |
| Section 11.04 | Limitation on Guarantor Liability | 102 |
| Section 11.05 | “Trustee” to Include Paying Agent | 103 |
| ARTICLE 12 Miscellaneous | 103 | |
| Section 12.01 | Notices | 103 |
| Section 12.02 | [Reserved] | 105 |
| Section 12.03 | Certificate and Opinion as to Conditions Precedent | 105 |
| Section 12.04 | Statements Required in Certificate or Opinion | 105 |
| Section 12.05 | Rules by Trustee and Agents | 106 |
iii
Table
of Contents
(continued)
Page
| Section 12.06 | No Personal Liability of Directors, Officers, Employees and Stockholders | 106 |
| Section 12.07 | Governing Law | 106 |
| Section 12.08 | No Adverse Interpretation of Other Agreements | 106 |
| Section 12.09 | Successors | 106 |
| Section 12.10 | Severability | 106 |
| Section 12.11 | Counterpart Originals | 107 |
| Section 12.12 | Table of Contents, Headings, Etc. | 107 |
| Section 12.13 | Intercreditor Agreements | 107 |
| Section 12.14 | Payments Due on Non-Business Days | 107 |
| Section 12.15 | Waiver of Jury Trial | 108 |
| ARTICLE 13 Collateral and Security | 108 | |
| Section 13.01 | Collateral Documents | 108 |
| Section 13.02 | Recording and Opinions | 108 |
| Section 13.03 | Release of Collateral | 109 |
| Section 13.04 | Specified Releases of Collateral | 109 |
| Section 13.05 | Release upon Satisfaction or Defeasance of all Outstanding Obligations | 110 |
| Section 13.06 | Form and Sufficiency of Release and Subordination | 110 |
| Section 13.07 | Purchaser Protected | 111 |
| Section 13.08 | Authorization of Actions to be Taken by the Collateral Agent Under the Collateral Documents | 111 |
| Section 13.09 | Authorization of Receipt of Funds by the Trustee Under the Collateral Documents | 113 |
| Section 13.10 | Action by the Collateral Agent | 113 |
| Section 13.11 | Compensation and Indemnity | 114 |
| Section 13.12 | Co-Collateral Agent; Separate Collateral Agent | 115 |
| EXHIBITS | ||
| Exhibit A | - | Form of Note |
| Exhibit B | - | Form of Certificate of Transfer |
| Exhibit C | - | Form of Certificate of Exchange |
| Exhibit D | - | Form of Certificate from Acquiring Accredited Investor |
| Exhibit E | - | Form of Supplemental Indenture |
| SCHEDULE | ||
| Schedule I | - | Post-Issuance Obligations |
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INDENTURE dated as of May 15, 2023, among CURO Group Holdings Corp., a Delaware corporation (and any successor thereto, the “Company”), the Guarantors (as defined herein) from time to time party hereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent.
The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the 7.500% Senior 1.5 Lien Secured Notes due 2028 (the “Notes”, including the $682,298,000 aggregate principal amount of Notes to be issued on the date hereof (the “Initial Notes”) and any Additional Notes (as defined herein) that may be issued from time to time):
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.01 Definitions.
“144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.
“Accredited Investor” means an “accredited investor” as defined in Rule 501(a) under the Securities Act, who is not also a QIB.
“Acquired Debt” means with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person was merged with or into or became a Subsidiary of such specified Person, including Indebtedness Incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person at the time such asset is acquired by such specified Person.
“Additional Notes” means any Notes issued after the Issue Date from time to time in accordance with the terms of this Indenture including the provisions of Sections 2.02, 2.14 and 5.09.
“Ad Hoc Group” has the meaning given to such term in the Credit Agreement (as in effect on the Issue Date).
“Adjusted Pre-Tax Income” means, for any Person(s) and any period, income from continuing operations before income taxes of such Person(s) for such period, determined in accordance with GAAP on a consolidated basis, but excluding, to the extent otherwise included therein, (a) one-time costs solely to the extent consisting of (i) transaction costs, restructuring expenses, expenses associated with sold or discontinued businesses and/or product lines and regulatory and legal charges in an aggregate amount during any four Fiscal Quarter period not to exceed the One Time Expense Cap and (ii) goodwill impairments, (b) non-cash gains or losses arising from the disposition of assets (other than loans and receivables) outside of the ordinary course of business, including gains or losses realized on the disposition of the Flexiti line of business, (c) depreciation and amortization (including amortization of goodwill and other intangibles), (d) equity gains or losses on the Katapult investment, (e) fair value changes, (f) income or loss from equity method investment (for the avoidance of doubt, without duplication of any amounts included in clause (d) of this definition), (g) allowance build or release, (h) interest expense in respect of recourse Indebtedness (other than (x) Indebtedness Incurred by a Receivables Entity in a Qualified Receivables Transaction and (y) any Indebtedness permitted by Section 5.09(b)(xv)) and (i) subject to the Company and its Subsidiaries being in compliance with the Facility Documents (as defined in the Credit Agreement), income (whether positive or negative) attributable to the Flexiti business line of the Company and its Subsidiaries.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
“Agent” means any Registrar, Paying Agent, any co-Registrar or any additional Paying Agent.
“AI Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold to Accredited Investors.
“Applicable Premium” means with respect to a Note at any redemption date, the greater of (i) 1.00% of the principal amount of such Note and (ii) the excess of (A) the present value at such redemption date of (1) the redemption price of such Note on August 1, 2024 (such redemption price being set forth in subsection (a) of Section 3.07 exclusive of any accrued interest) plus (2) all required remaining scheduled interest payments due on such Note through August 1, 2024 (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate plus 0.50%, over (B) the principal amount of such Note on such redemption date.
“Applicable Procedures” means, with respect to any tender, redemption, payment, transfer or exchange of beneficial interests in a Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that are applicable to such tender, redemption, payment, transfer or exchange.
“Asset Sale” means:
(1) the Disposition of any assets;
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(2) the issuance or sale by the Company or any of its Subsidiaries of Equity Interests of any of the Company’s Subsidiaries; and
(3) an Event of Loss.
Notwithstanding the foregoing, none of the following will be deemed to be an Asset Sale:
(i) a Disposition of assets to the Company or any Subsidiary of the Company (other than a Receivables Entity and other than Loan SPV); provided that any Disposition by a Company Party to a Subsidiary that is not a Company Party in reliance on this clause (i) shall be for cash and for Fair Market Value;
(ii) an issuance of Equity Interests by a Subsidiary of the Company to the Company or to a Wholly-Owned Subsidiary of the Company;
(iii) a Restricted Payment that is permitted by Section 5.07 or a Permitted Investment;
(iv) the Incurrence of Permitted Liens and, subject to the Intercreditor Agreements, the Disposition of assets subject to such Liens by or on behalf of the Person holding such Liens;
(v) the Disposition of accounts in accordance with industry practice in connection with the compromise or collection thereof;
(vi) any Disposition of cash or Cash Equivalents;
(vii) the lease, assignment or sub-lease of any property in the ordinary course of business;
(viii) any surrender or waiver of contract rights or the settlement, release or surrender of contract rights or other litigation claims in the ordinary course of business;
(ix) sales of assets that have become worn out, obsolete or damaged or otherwise unsuitable for use in connection with the business of the Company or any of its Subsidiaries;
(x) the license of patents, trademarks, copyrights, software applications and know-how to Subsidiaries of the Company and to third Persons in the ordinary course of business;
(xi) the Disposition of precious metals in the ordinary course of business;
(xii) Dispositions of motor vehicles securing consumer loans made by the Company and its Subsidiaries in the ordinary course of business;
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(xiii) sales of loans receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Entity in connection with a Qualified Receivables Transaction;
(xiv) transfers of loans receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” by a Receivables Entity in a Qualified Receivables Transaction; and
(xv) [***]
“Backstop Notes” means the 18.00% Senior Secured Notes issued by the Loan SPV, as in effect on the Issue Date and with such modifications as the holders thereof and Loan SPV may agree, which modifications are immaterial or which reflect corresponding modifications to the loans under the Credit Agreement in accordance with the Credit Agreement.
“Bankruptcy Law” means any of Title 11 of the United States Code, 11 U.S.C. §§ 101, et seq., the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and the Winding-Up and Restructuring Act (Canada), each as now and hereafter in effect, any successors to such statutes and any other applicable bankruptcy, insolvency, winding-up, dissolution, restructuring, receivership, arrangement, liquidation, reorganization or similar law of any jurisdiction providing relief from or otherwise affecting the rights of creditors.
“Board of Directors” means:
(a) 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;
(b) with respect to a partnership, the board of directors or other governing body of the general partner of the partnership;
(c) with respect to a limited liability company, the board of directors, managers or other governing body, and in the absence of the same, the managing member or members or any controlling committee of managing members thereof; and
(d) with respect to any other Person, the board or committee of such Person or other individual or entity serving a similar function.
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“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in the City of New York or in the city of the Corporate Trust Office of the Trustee are authorized or obligated by law or executive order to close.
“Business Plan” means an expenses savings plan of the Company and its Subsidiaries for a period of at least twenty-four (24) months following the Issue Date, which business plan shall include, inter alia, detail as to proposed reductions in selling, general and administrative expenses and operating expenses of the Company and its Subsidiaries.
“Canadian Direct Lending Subsidiary” has the meaning specified in clause (1) of the definition of “Permitted Investments”.
“Canadian Recourse Facility” has the meaning specified in Section 5.09(b)(xv).
“Canadian Recourse Facility Borrower” has the meaning specified in Section 5.09(b)(xv).
“Canadian Subsidiary” means any Subsidiary incorporated or organized in Canada or any province or territory thereof.
“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under a lease of (or other Indebtedness arrangements conveying the right to use) real or personal property which are required to be classified and accounted for as a capital lease or capitalized on a balance sheet of such Person determined in accordance with GAAP and the amount of such obligations shall be the capitalized amount thereof in accordance with GAAP and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease or other arrangement prior to the first date upon which such lease or other arrangement may be terminated by the lessee without payment of a penalty.
“Capital Stock” of any Person means any and all shares, interests, participations or other equivalents (however designated) of such Person’s capital stock, including preferred stock, whether now outstanding or issued after the Issue Date.
“Cash Equivalents” means:
(1) marketable direct obligations issued by, or unconditionally Guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition;
(2) certificates of deposit, time deposits, eurodollar time deposits, overnight bank deposits or banker’s acceptances having maturities of one year or less from the date of acquisition issued by any lender to the Company or any of its Subsidiaries or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $1,000,000,000;
(3) commercial paper of an issuer rated at least A-1 by Standard & Poor’s Ratings Group (“S&P”) or P-1 by Moody’s Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within one year from the date of acquisition;
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(4) repurchase obligations of any financial institution satisfying the requirements of clause (2) of this definition, having a term of not more than 30 days, with respect to securities issued or fully Guaranteed or insured by the United States government;
(5) securities with maturities of one year or less from the date of acquisition issued or fully Guaranteed by any state of the United States, by any political subdivision or taxing authority of any such state or by any foreign government, the securities of which state, political subdivision, taxing authority or foreign government (as the case may be) have one of the two highest rating obtainable from either S&P or Moody’s;
(6) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any financial institution satisfying the requirements of clause (2) of this definition;
(7) money market, mutual or similar funds that invest at least 95% of their assets in assets satisfying the requirements of clauses (1) through (6) of this definition;
(8) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $1,000,000,000; and
(9) with respect to Foreign Subsidiaries only, any Investments outside of the United States that are functional foreign equivalents in all material respects to the Cash Equivalents described in clauses (1) through (5) above.
“Cash Management Obligations” means, with respect to any Person, all obligations of such Person in respect of overdrafts and liabilities owed to any other Person that arise from treasury, depositary or cash management services, including in connection with any automated clearing house transfers of funds, or any similar transactions.
“CFC” means a Subsidiary of the Company that is a controlled foreign corporation within the meaning of Section 957(a) of the Code.
“Change of Control” means the occurrence of any of the following:
(1) the direct or indirect Disposition (other than by way of merger or consolidation subject to Section 6.01(a)), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) other than the Company or any of its Subsidiaries;
(2) the adoption of a plan relating to the liquidation or dissolution of the Company; or
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(3) the consummation of any transaction (including any merger or consolidation) the result of which is that any “person” or “group” (as defined above) other than the Permitted Holders, becomes the “beneficial owner” (as such term is defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (3) such “person” or “group” shall be deemed to have “beneficial ownership” of all shares that such “person” or “group” has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the Voting Stock of the Company.
“Clearstream” means Clearstream Banking, société anonyme, Luxembourg (or any successor thereto).
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Collateral” means, collectively, all of the property (including Equity Interests) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Indenture Obligations.
“Collateral Agent” means U.S. Bank Trust Company, National Association, in its capacity as Collateral Agent hereunder and under the Collateral Documents, together with its successors in such capacity.
“Collateral Documents” means the Security Agreement, the Pledge Agreement, the Mortgages and any other agreement, document or instrument pursuant to which a Lien is granted by the Company or a Guarantor to secure any Indenture Obligations or under which rights or remedies with respect to any such Lien are governed, including UCC financing statements and amendments thereto and filings with the U.S. Patent and Trademark Office and the U.S. Copyright Office.
“Company Party” means each of the Company and Guarantors.
“Corporate Trust Office of the Trustee” shall be the address of the Trustee specified in Section 12.01 or such other address as to which the Trustee may designate by notice to the Company.
“Credit Agreement” means the First Lien Credit Agreement, dated as of May 15, 2023, by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors, the lenders from time to time parties thereto (the “Credit Agreement Lenders”) and the Credit Agreement Agent, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, as amended or supplemented from time to time in accordance with its terms.
“Credit Agreement Agent” means Alter Domus (US) LLC, as the administrative agent and the collateral agent under the Credit Agreement, or any successor thereto.
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“CSO Obligations” means obligations to purchase, or other Guarantees of, consumer loans the making of which were facilitated by the Company or a Subsidiary of the Company acting as a credit services organization or other similar service provider.
“Currency Hedging Obligations” means the obligations of any Person pursuant to an arrangement designed to protect such Person against fluctuations in currency exchange rates.
“Default” means any event that is or with the passage of time or the giving of notice or both would be an Event of Default; provided that any Default that results solely from the taking of an action that would have been permitted but for the continuation of a previous Default shall be deemed to be cured if such previous Default is cured prior to becoming an Event of Default.
“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.
“Depositary” means a clearing agency registered under the Exchange Act that is designated to act as Depositary for the Notes until a successor Depositary shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and, thereafter, “Depositary” shall mean or include such successor Depositary. The Depositary initially is DTC.
“Designated Non-Cash Consideration” means the Fair Market Value of non-cash consideration received by the Company or any of its Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent payment, redemption, retirement, sale or other disposition of such Designated Non-Cash Consideration. A particular item of Designated Non-Cash Consideration will no longer be considered to be outstanding when and to the extent it has been paid, redeemed or otherwise retired or sold or otherwise disposed of in compliance with Section 5.10.
“Dispose” or “Disposed of” means to convey, sell, lease, sell and leaseback, assign, farm-out, transfer or otherwise dispose of any property, business or asset. The term “Disposition” shall have a correlative meaning to the foregoing.
“Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder) or upon the happening of any event:
(1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock convertible or exchangeable solely at the option of the Company or a Subsidiary of the Company; provided that any such conversion or exchange will be deemed an Incurrence of Indebtedness or Disqualified Stock, as applicable);
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(3) is redeemable at the option of the holder thereof, in whole or in part; or
(4) provides for scheduled mandatory payments of dividends in cash,
in the case of each of clauses (1), (2), (3) and (4), on or prior to the 91st day after the Stated Maturity of the Notes; provided that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring on or prior to the 91st day after the Stated Maturity of the Notes will not constitute Disqualified Stock if the terms of such Capital Stock provide that such Person may not repurchase or redeem any such Capital Stock pursuant to such provisions prior to the Company’s purchase of the Notes as are required to be purchased pursuant to Sections 5.10 and 5.14.
“Domestic Subsidiary” means any Subsidiary other than a Foreign Subsidiary.
“DTC” means The Depository Trust Company, a New York corporation.
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for Capital Stock).
“Equity Offering” means a sale for cash of either common equity securities or units including or representing common equity securities of the Company (other than to a Subsidiary of the Company).
“Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear System (or any successor thereto).
“Event of Loss” means, with respect to any property or asset, any (i) loss or destruction of, or damage to, such property or asset or (ii) any condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property or asset, or confiscation or requisition of the use of such property or asset.
“Exchange” means the exchange of Existing Notes by certain holders thereof for Notes to occur on the Issue Date.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time, any successor statute thereto, and any regulations promulgated thereunder.
“Excluded Assets” means:
(1) the voting Capital Stock of any CFC (other than a Canadian Subsidiary) in excess of 65% of all of the outstanding voting Capital Stock of such CFC;
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(2) motor vehicles covered by certificates of title or ownership to the extent that a security interest cannot be perfected solely by filing a UCC-1 financing statement (or similar instrument);
(3) (x) real property owned by the Company or any of the Guarantors in fee simple that has a Fair Market Value of less than $2.5 million and (y) leasehold interests in real property with respect to which the Company or any Guarantor is a tenant or subtenant;
(4) rights under any contracts that contain a valid and enforceable prohibition on collateral assignment of such rights (other than to the extent that any such prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code of any relevant jurisdiction or any other applicable law or principles of equity), but only for so long as such prohibition exists and is effective and valid;
(5) Equity Interests in a Receivables Entity only to the extent that terms of the related Qualified Receivables Facility prohibit the pledge thereof to secure the Obligations;
(6) (i) deposit accounts of the Company or any Guarantor and securities accounts held by First Heritage Credit, LLC to the extent (a) exclusively used for payroll, payroll taxes, other trust fund taxes and other employee wage and benefit payments or (b) the terms of a Qualified Receivables Facility (which terms are permitted pursuant to 5.08(b)(xiii)) prohibit the pledge thereof to secure the Obligations, and (ii) each deposit or security account expressly excluded as Collateral pursuant to the Security Agreement;
(7) property or assets owned by any Subsidiary of the Company that is not a Guarantor;
(8) any application for registration of a trademark filed with the United States Patent and Trademark Office on an intent-to-use basis until such time (if any) as a statement of use or amendment to allege use is accepted by such office, at which time such trademark shall automatically become part of the Collateral and subject to the security interest of the Indenture Documents;
(9) [reserved];
(10) Equity Interests in any joint venture only to the extent and for so long as a pledge thereof to secure the Obligations is not permitted by the terms of the joint venture or other agreement under which such joint venture is organized; and
(11) any segregated deposits that constitute Permitted Liens under clauses (5), (6), (9), (11), (12) and (19) of the definition of Permitted Liens, in each case, that are prohibited from being subject to other Liens;
provided, proceeds and products from any and all of the foregoing excluded assets described in clauses (1) through (11) shall not constitute Excluded Assets, unless such proceeds or products would otherwise constitute Excluded Assets if not proceeds or products of the foregoing.
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Notwithstanding the foregoing, to the extent that the Company or a Guarantor grants a Lien on any asset or right described in clause (1) through (11) above to secure any First Priority Claims or Existing Notes, such asset or right shall not constitute “Excluded Assets.”
“Existing First Heritage SPV Facility” means the non-recourse facility established by that certain Credit Agreement, dated as of July 13, 2022, among First Heritage Financing I, LLC, as borrower, First Heritage Credit, LLC, as servicer, the subservicers party thereto, the lenders from time to time party thereto, the agents for the lender groups from time to time party thereto, Credit Suisse AG, New York Branch, as administrative agent and structuring and syndication agent, ComputerShare Trust Company, National Association, as paying agent, image file custodian, backup servicer and collateral agent, and Wilmington Trust, National Association, as borrower loan trustee, and as amended, amended and restated, supplemented, replaced or otherwise modified from time to time.
“Existing Flexiti Securitization Notes” means the non-recourse notes issued pursuant to that certain Trust Indenture, dated as of December 9, 2021, by and between Flexiti Securitization Limited Partnership, Flexiti Securitization General Partner Inc., as issuer, and Computershare Trust Company, as indenture trustee, as supplemented by that certain Series 2021-1 Supplemental Indenture, dated as of December 9, 2021, and that certain Amended and Restated Series 2021-1 Supplemental Indenture, dated as of June 29, 2022, and as further amended, amended and restated, supplemented or otherwise modified from time to time.
“Existing Flexiti SPV Facility” means the non-recourse facility established by that certain Fifth Amended and Restated Credit Agreement, dated as of September 29, 2022, among Flexiti Financing SPE Corp., as borrower, Flexiti Financial Inc., as seller and servicer, the lenders from time to time party thereto, Credit Suisse AG, New York Branch, as facility agent, lead arranger, syndication agent and documentation agent, Midtown Madison Management LLC, as class B agent, and TSX Trust Company, as collateral agent and verification agent, and as amended, amended and restated, supplemented, replaced or otherwise modified from time to time.
“Existing Heights SPV Facility” means the non-recourse facility established by that certain Credit Agreement, dated as of July 15, 2022, among Heights Financing I, LLC, as borrower, SouthernCo, Inc., as servicer, the subservicers party thereto, the lenders from time to time party thereto, the agents for the lender groups from time to time party thereto, Credit Suisse AG, New York Branch, as administrative agent and structuring and syndication agent, ComputerShare Trust Company, National Association, as paying agent, image file custodian, backup servicer and collateral agent, and Wilmington Trust, National Association, as borrower loan trustee, and as amended, amended and restated, supplemented, replaced or otherwise modified from time to time.
“Existing Indebtedness” means any Indebtedness of the Company or any of its Subsidiaries outstanding on the Issue Date, other than the Existing Notes, the Credit Agreement, Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility, until such Indebtedness is repaid.
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“Existing Notes” means the Company’s 7.500% Senior Secured Notes due 2028 issued under the Existing Notes Indenture.
“Existing Notes Collateral Agent” means TMI Trust Company, as Collateral Agent under the Existing Notes Indenture, together with its successors in such capacity.
“Existing Notes Indenture” means that certain Indenture, dated as of July 30, 2021, entered into by the Company, the guarantors party thereto and the Existing Notes Collateral Agent in connection with the issuance of the Existing Notes, as amended from time to time.
“Existing Notes Indenture Documents” shall mean the “Indenture Documents” as defined in the Existing Notes Indenture (as in effect as of the Issue Date). “Existing Revolving Canada SPV Facility” means the non-recourse facility established by that certain Second Amended and Restated Asset-Backed Revolving Credit Agreement, dated as of November 12, 2021, among Curo Canada Receivables Limited Partnership, as borrower, by its general partner, Curo Canada Receivables GP Inc., the lenders party thereto and Waterfall Asset Management, LLC, as administrative agent, and as amended, amended and restated, supplemented, replaced or otherwise modified from time to time.
“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the Company, as applicable; provided, however, that with respect to any such value less than $2.5 million, only the good faith determination of the Company’s senior management shall be required.
“Fiscal Quarter” means each fiscal quarter of the Company and its Subsidiaries.
“Fiscal Year” means each fiscal year of the Company and its Subsidiaries.
“First Priority Agent” means the agent designated as the “First Lien Agent” under the First Lien Intercreditor Agreement and shall initially be the Credit Agreement Agent, together with its successors and permitted assigns in such capacity.
“First Priority Cash Management Obligations” means any Cash Management Obligations secured by any Collateral under the First Priority Collateral Documents.
“First Priority Claims” means (a) Indebtedness under credit facilities permitted pursuant to clause (i) of the definition of the term “Permitted Debt,” (b) First Priority Cash Management Obligations and First Priority Hedging Obligations and (c) all other Obligations of the Company and the Guarantors under the documents relating to Indebtedness described in clauses (a) and (b) above.
“First Priority Collateral Documents” means the First Priority Security Agreement, the First Priority Pledge Agreement, the First Priority Mortgages and any other agreement, document or instrument pursuant to which a Lien is granted (or purported to be granted) securing any First Priority Claims or under which rights or remedies with respect to such Liens are governed.
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“First Priority Hedging Obligations” means any Hedging Obligations that are permitted to be incurred under clause (vii) of the definition of the term “Permitted Debt” and that are secured (or purported to be secured) by any collateral under the First Priority Collateral Documents.
“First Priority Intercreditor Agreement” means the intercreditor agreement, dated as of the Issue Date, among the First Priority Agent, the Collateral Agent and the Existing Notes Collateral Agent, as it may be amended, restated, supplemented and/or otherwise modified from time to time.
“First Priority Mortgages” means a collective reference to each mortgage, deed of trust, deed to secure debt and any other document or instrument under which any Lien on real property owned by the Company or any Guarantor is granted to secure any First Priority Claims or under which rights or remedies with respect to any such Liens are governed.
“First Priority Pledge Agreement” means the Pledge Agreement, dated as of the Issue Date, among the Company and certain Subsidiaries of the Company, as assignors, in favor of the Credit Agreement Agent, as amended or supplemented from time to time in accordance with its terms.
“First Priority Security Agreement” means the Security Agreement, dated as of the Issue Date, among the Company and certain subsidiaries of the Company, as assignors, in favor of the Credit Agreement Agent, as amended or supplemented from time to time in accordance with its terms.
“Foreign Subsidiary” means any Subsidiary incorporated or organized in a jurisdiction other than the United States or any state thereof or the District of Columbia.
“Founders” means each of (i) Doug Rippel, (ii) Chad Faulkner, (iii) Mike McKnight, and (iv) any (a) spouse or lineal descendent (whether natural or adopted) of any Person listed in clauses (i) through (v) or (b) trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or persons beneficially holding an 80% or more controlling interest of which consist of such Person and/or any of the Persons referred to in the immediately preceding clause (a).
“GAAP” means generally accepted accounting principles in the United States of America, as in effect on the Issue Date, consistently applied.
“Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depositary or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Section 2.01, 2.06(b) or 2.06(d).
“Global Note Legend” means the legend set forth in Section 2.06(g)(2), which is required to be placed on all Global Notes issued under this Indenture.
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“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Governmental Authorization” means any permit, license, authorization, certification, registration, approval, plan, directive, consent order or consent decree of or from any Governmental Authority.
“Guarantee” means, with respect to any Person, any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or
(2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.
The term “Guarantee” used as a verb has a corresponding meaning.
“Guarantors” means each of the Guarantors listed in the signature pages hereto and each other Subsidiary of the Company that hereafter executes a Notes Guarantee in accordance with the provisions of this Indenture.
“Hedging Obligation” of any Person means (i) any Currency Hedging Obligation designed to protect the Company or any of its Subsidiaries from fluctuations in currency exchange rates and not to speculate on such fluctuations and (ii) any obligations of such Person pursuant to any Interest Rate Protection Agreement.
“Holder” means a Person in whose name a Note is registered.
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“Incur” means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume (pursuant to a merger, consolidation, acquisition or other transaction), Guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and “Incurrence” and “Incurred” shall have meanings correlative to the foregoing); provided, however, that a change in GAAP that results in an obligation of such Person that exists at such time becoming Indebtedness shall not be deemed an Incurrence of such Indebtedness. Indebtedness otherwise Incurred by a Person before it becomes a Subsidiary of the Company shall be deemed to have been Incurred at the time it becomes such a Subsidiary.
“Indebtedness” means (without duplication), with respect to any Person, whether recourse is to all or a portion of the assets of such Person and whether or not contingent:
(1) obligations of such Person in respect of principal for money borrowed;
(2) obligations of such Person in respect of principal evidenced by bonds, debentures, notes or other similar instruments;
(3) every reimbursement obligation of such Person with respect to letters of credit, banker’s acceptances or similar facilities issued for the account of such Person, other than obligations with respect to letters of credit securing obligations, other than obligations referred to in clauses (1), (2) and (5) of this definition, entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the 10th day following payment on the letter of credit;
(4) every obligation of such Person for the deferred purchase price of property or services (excluding any trade payables and other accrued current liabilities incurred in the ordinary course of business which are not overdue by more than 30 days or which are being contested in good faith);
(5) every Capital Lease Obligation of such Person;
(6) the maximum fixed redemption or repurchase price of Disqualified Stock of such Person at the time of determination plus accrued but unpaid dividends;
(7) every net payment obligation of such Person under interest rate swap, cap, collar or similar agreements or foreign currency hedge, exchange or similar agreements of such Person (collectively, “Hedging Obligations”);
(8) every obligation of the type referred to in clauses (1) through (7) of this definition of another Person the payment of which, in either case, such Person has Guaranteed or is liable, directly or indirectly, as obligor, guarantor or otherwise, to the extent of such Guarantee or other liability; and
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(9) all obligations referred to in clauses (1) through (8) above of other Persons, the payment of which is secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such obligations; provided that the amount of such Indebtedness will be the lesser of (A) the Fair Market Value of such property at such date of determination and (B) the amount of such Indebtedness.
Notwithstanding the foregoing, Indebtedness shall not include CSO Obligations. The term “Indebtedness” shall not include any lease, concession or license of property (or guarantee thereof) which would be considered an operating lease under GAAP as in effect on the Issue Date, any prepayments of deposits received from clients or customers in the ordinary course of business, or obligations under any license, permit or other approval (or guarantees given in respect of such obligations) incurred in the ordinary course of business.
Notwithstanding anything in this Indenture to the contrary, the calculation of Indebtedness shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” or any successor thereto (including pursuant to the Accounting Standards Codification), to value any Indebtedness of the Company or any Subsidiary at “fair value,” as defined therein. For the avoidance of doubt, Indebtedness does not include any liability for United States federal, state, local, foreign or other taxes owed or owing by the Company or any of its Subsidiaries.
“Indenture” means this Indenture, as amended or supplemented from time to time.
“Indenture Documents” means the Notes, this Indenture, the Notes Guarantees, the Collateral Documents and the Intercreditor Agreements.
“Indenture Obligations” means all Obligations in respect of the Notes or arising under the Indenture Documents, including the fees and expenses (including, without limitation, fees, expenses and disbursements of agents, counsel and professional advisors) of the Trustee and Collateral Agent. Indenture Obligations shall include all interest accrued (or which would, absent the commencement of an insolvency or liquidation proceeding, accrue) after the commencement of an insolvency or liquidation proceeding in accordance with and at the rate specified in the relevant Indenture Document whether or not the claim for such interest is allowed as a claim in such insolvency or liquidation proceeding.
“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.
“Intercreditor Agreements” means the First Priority Intercreditor Agreement and the Junior Intercreditor Agreement.
“Interest Rate Protection Agreement” means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement, option or future contract or other similar agreement or arrangement designed to protect the Company or any of its Subsidiaries against fluctuations in interest rates or for the purpose of fixing, hedging or swapping interest rates.
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“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of direct or indirect loans (including Guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commissions, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided that an acquisition of assets, Equity Interests or other securities by the Company or a Subsidiary of the Company for consideration consisting of common equity securities of the Company shall not be deemed to be an Investment. If the Company or any Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of the Company such that after giving effect to any such sale or disposition, such Person is no longer a direct or indirect Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Equity Interests of such Subsidiary not sold or disposed of.
The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any dividend, distribution, interest payment, return of capital, repayment or other amount received in cash by the Company or a Subsidiary of the Company in respect of such Investment.
“Issue Date” means the date on which the Notes were initially issued.
“Issue Date SPV Amendments” means waivers or amendments with respect to each of the Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility, each dated and effective as of the Issue Date.
“Junior Intercreditor Agreement” means the intercreditor agreement, dated as of the Issue Date, between the Collateral Agent and the Existing Notes Collateral Agent, as it may be amended, restated, supplemented and/or otherwise modified from time to time.
“Law” means all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, encumbrance or hypothecation of any kind in respect of that asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any other agreement to give a security interest in and any filing of any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
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“Liquidity” means Unrestricted Cash of the Company and its Subsidiaries.
“Loan SPV” means CURO SPV, LLC, a Delaware limited liability company.
“Maximum Operating Expense to Asset Ratio” means, for each Fiscal Quarter set forth below, a ratio of (i) Operating Expenses for the four-Fiscal-Quarter period ending on the last day of such Fiscal Quarter to (ii) to the average amount of gross loans receivable (as shown on the balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP) as of the last day of each Fiscal Quarter in the five-Fiscal-Quarter period ending on the last day of such Fiscal Quarter of no greater than the applicable amount set forth below with to such Fiscal Quarter:
| Fiscal Quarter ended: | Operating Expense to Asset Ratio |
| March 31, 2024 | [***] |
| June 30, 2024 | [***] |
| September 30, 2024 | [***] |
| December 31, 2024 | [***] |
| March 31, 2025 | [***] |
| June 30, 2025 | [***] |
| September 30, 2025 | [***] |
| December 31, 2025 | [***] |
| March 31, 2026 | [***] |
| June 30, 2026 | [***] |
| September 30, 2026 | [***] |
| December 31, 2026 | [***] |
| March 31, 2027 | [***] |
| June 30, 2027 | [***] |
| September 30, 2027 | [***] |
| December 31, 2027, and thereafter | [***] |
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“Minimum Adjusted Pre-Tax Income” means, for each Fiscal Quarter set forth below, Adjusted Pre-Tax Income of the Company and its Subsidiaries for the four-Fiscal-Quarter period ending on the last day of such Fiscal Quarter of no less than the applicable amount set forth below with respect to such Fiscal Quarter:
| Fiscal Quarter ended: | Minimum Adjusted Pre-Tax Income |
| March 31, 2024 | [***] |
| June 30, 2024 | [***] |
| September 30, 2024 | [***] |
| December 31, 2024 | [***] |
| March 31, 2025 | [***] |
| June 30, 2025 | [***] |
| September 30, 2025 | [***] |
| December 31, 2025 | [***] |
| March 31, 2026 | [***] |
| June 30, 2026 | [***] |
| September 30, 2026 | [***] |
| December 31, 2026 | [***] |
| March 31, 2027 | [***] |
| June 30, 2027 | [***] |
| September 30, 2027 | [***] |
| December 31, 2027, and thereafter | [***] |
“Mortgages” means a collective reference to each mortgage, deed of trust, deed to secure debt and any other document or instrument under which any Lien on real property owned by the Company or any Guarantor is granted to secure any Indenture Obligations or under which rights or remedies with respect to any such Liens are governed.
“Net Proceeds” means the aggregate cash proceeds received by the Company or any of its Subsidiaries in respect of any Asset Sale (including any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (i) the direct costs relating to such Asset Sale (including legal, accounting and investment banking fees and sales commissions), (ii) any relocation expenses Incurred as a result thereof, (iii) taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), (iv) amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale which Lien is senior in priority to the Liens on such asset or assets securing the Notes granted by the Collateral Documents, if any, and (v) any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP.
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“Non-U.S. Person” means a Person who is not a U.S. Person.
“Note Custodian” means the Trustee, as custodian for the Depositary with respect to the Notes in global form, or any successor entity thereto.
“Notes Guarantee” means, collectively, the Guarantees of the Guarantors set forth in Article 11.
“Notes Secured Parties” means, collectively, the Collateral Agent, the Trustee and the Holders.
“Obligations” means any principal, interest (including, with respect to the Notes, interest that accrues after the commencement of an insolvency or bankruptcy case, regardless of whether such interest is an allowed claim under such case), penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
“Officer” means, with respect to any Person, the chairman of the board, chief executive officer, chief financial officer, president, any executive vice president, senior vice president or vice president, the treasurer, principal accounting officer or the secretary of such Person.
“Officer’s Certificate” means a certificate signed by the Chairman of the Board of Directors, the President, a Vice President, the Chief Financial Officer, the Treasurer, Assistant Treasurer, Secretary or the Assistant Secretary of the Company.
“One Time Expense Cap“ means $[***] million; provided, that the One Time Expense Cap shall be increased by an amount equal to the amount of any cost-savings set forth in the Business Plan and realized by the Company or any of its Subsidiaries in the period covered by the Business Plan included in the applicable period of four Fiscal Quarters; provided, further, that under no circumstances will the One Time Expense Cap exceed $[***] million.
“Operating Expenses” means, with respect to any Person(s) for any period, the operating expenses of such Person(s) for such period, determined in accordance with GAAP on a consolidated basis, excluding, to the extent otherwise included in Operating Expenses, (a) one-time costs solely to the extent consisting of (i) transaction costs, restructuring expenses, expenses associated with sold or discontinued businesses and/or product lines and regulatory and legal charges in an aggregate amount during any period of four Fiscal Quarters not to exceed the One Time Expense Cap and (ii) goodwill impairments, (b) non-cash gains or losses arising from the disposition of assets (other than loans and receivables) outside of the ordinary course of business, including gains or losses realized on the disposition of the Flexiti line of business, and (c) depreciation and amortization (including amortization of goodwill and other intangibles).
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“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company.
“Participant” means, with respect to the Depositary, a Person who has an account with the Depositary.
“Pension Plan” shall have the meaning given to such term in the Credit Agreement as in effect on the Issue Date.
“Permitted Equity Issuance” means any issuance of Equity Interests (other than Disqualified Stock) by the Company permitted under this Agreement.
“Permitted Holders” means the Founders.
“Permitted Investments” means:
(1) (x) any Investment in the Company or any Subsidiary of the Company (other than a Receivables Entity and other than Loan SPV); provided that the Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value) of all Investments by the Company Parties in Subsidiaries of the Company other than Company Parties pursuant to this clause (x) of paragraph (1), together with all Investments pursuant to paragraph (3) below outstanding at such time, shall not exceed $10 million and (y) any Investment in any Canadian Subsidiary (other than a Receivables Entity) in the form of cash or Cash Equivalents made in the ordinary course of business, provided that the assets held by such Canadian Subsidiary in which an Investment is made pursuant to this clause (y) of paragraph (1) consist entirely of assets comprising the Canadian direct-lending line of business (other than de minimis assets) (any Subsidiary described in this clause (y), a “Canadian Direct Lending Subsidiary”);
(2) any Investment in cash or Cash Equivalents or the Notes;
(3) any Investment by the Company or any Subsidiary of the Company in a Person, if as a result of such Investment (A) such Person becomes a of the Company (other than a Receivables Entity and other than Loan SPV) or (B) such Person is merged or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Subsidiary of the Company (other than a Receivables Entity and other than Loan SPV); provided that the Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value) of all Investments pursuant to this paragraph (3), together with all Investments by Company Parties in Subsidiaries of the Company other than Company Parties pursuant to clause (x) of paragraph (1) above outstanding at such time, shall not exceed $10 million;
(4) any Investment existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date; provided that the amount of any such Investment may be increased only (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under this Indenture;
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(5) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 5.10;
(6) Hedging Obligations that are Incurred by the Company or any of its Subsidiaries for the purpose of fixing or hedging (A) interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) currency exchange risk in connection with existing financial obligations and not for purposes of speculation;
(7) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits;
(8) loans and advances to officers, directors and employees of the Company and its Subsidiaries in the ordinary course of business not to exceed $2.5 million in the aggregate at any one time outstanding;
(9) any Investment consisting of a Guarantee permitted by Section 5.09;
(10) (a) the issuance of loans under the Credit Agreement on the Issue Date in an aggregate initial principal amount equal to $[***] to Loan SPV and (b) any redemption or repurchase of the Backstop Notes by Loan SPV in accordance with the terms thereof;
(11) Investments received in settlement of bona fide disputes or as distributions in bankruptcy, insolvency, foreclosure or similar proceedings, in each case in the ordinary course of business;
(12) advances to customers or suppliers in the ordinary course of business;
(13) Investments consisting of purchases and acquisitions of supplies, materials and equipment or purchases or contract rights or licenses of intellectual property, in each case in the ordinary course of business;
(14) receivables owing to the Company or any of its Subsidiaries if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;
(15) CSO Obligations of the Company and its Subsidiaries incurred in the ordinary course of business;
(16) Investments consisting of obligations of officers and employees to the Company or its Subsidiaries in connection with such Officer’s and employees’ acquisition of Equity Interests in the Company (other than Disqualified Stock) so long as no cash is actually advanced by the Company or any of its Subsidiaries in connection with the acquisition of such obligations); or
(17) Investments in a Receivables Entity, or any Investment by a Receivables Entity in any other Person, in each case, in connection with a Qualified Receivables Transaction, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Transaction or any related Indebtedness; provided, however, that any Investment in a Receivables Entity is in the form of a purchase money note, contribution or sale of receivables or an equity interest.
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“Permitted Liens” means:
(1) subject to the terms of the Intercreditor Agreements, Liens on the Collateral securing Indebtedness permitted to be Incurred pursuant to Section 5.09(b)(i) and permitted Guarantees thereof (which (a) in the case of Liens securing obligations under the Credit Agreement and permitted Guarantees thereof, shall be senior in priority to the Liens securing the Indenture Obligations and the Guarantees thereof and (b) in the case of Liens securing obligations under the Existing Notes and permitted Guarantees thereof, shall be junior in priority to the Liens securing the Indenture Obligations and the Guarantees thereof), in each case in accordance with the applicable Intercreditor Agreement;
(2) Liens in favor of the Company or a Guarantor;
(3) Liens on the loans under the Credit Agreement held by Loan SPV, the proceeds of such loans and the other assets of Loan SPV, in each case securing the Backstop Notes;
(4) [reserved;]
(5) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds, workmen’s compensation or unemployment obligations or other obligations of a like nature, or to secure letters of credit issued with respect to such obligations, Incurred in the ordinary course of business;
(6) Liens consisting of deposits in connection with leases or other similar obligations, or securing letters of credit issued in lieu of such deposits, incurred in the ordinary course of business, and cash deposits in connection with acquisitions otherwise permitted under this Indenture;
(7) [reserved];
(8) Liens existing on the Issue Date and replacement Liens that do not encumber additional assets or secure increased obligations, unless such encumbrance is otherwise permitted;
(9) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent for more than 30 days or that are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;
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(10) Liens securing Permitted Refinancing Debt other than Indebtedness incurred pursuant to Section 5.09(b)(i), provided that the obligor under such Indebtedness was permitted to Incur such Liens with respect to the Indebtedness so refinanced under this Indenture and:
(a) the new Lien is limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof);
(b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such Permitted Refinancing Debt; and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge; and
(c) if the original Lien is on any portion of the Collateral and junior in priority to the Liens securing the Notes and the Notes Guarantees, the new Lien shall be junior in priority to the Liens securing the Notes and the Notes Guarantees;
(11) statutory and common law Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other similar Liens arising in the ordinary course of business with respect to amounts that are not yet delinquent for more than 30 days or that are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;
(12) Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;
(13) Liens arising from filings of Uniform Commercial Code financing statements or similar documents regarding leases or otherwise for precautionary purposes relating to arrangements not constituting Indebtedness;
(14) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Company or any of its Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Company and its Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Company or any of its Subsidiaries in the ordinary course of business;
(15) Liens securing Indenture Obligations or any Guarantees thereof;
(16) [reserved];
(17) [reserved];
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(18) encumbrances or exceptions expressly permitted pursuant to the Mortgages;
(19) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, including Liens securing letters of credit issued in the ordinary course of business in connection therewith;
(20) [reserved];
(21) Liens on the property or assets of the Canadian Recourse Facility Borrower securing the Canadian Recourse Facility; and
(22) any Lien on (a) loans receivable and related assets of the types specified in the definition of “Qualified Receivables Transaction” transferred to a Receivables Entity or on assets of a Receivables Entity or (b) Servicer Accounts, in each case under clauses (a) or (b), granted in connection with (and as security for) a Qualified Receivables Transaction.
For purposes of this definition, the term “Indebtedness” shall be deemed to include interest in connection with or in respect of any referenced Indebtedness.
“Permitted Refinancing Debt” means any Indebtedness of the Company or any of its Subsidiaries issued in exchange for, or the net cash proceeds of which are used to extend, refinance (including through the issuance of debt securities), renew, replace (whether or not upon termination and whether with the original lenders, institutional investors or otherwise), defease or refund other Indebtedness of the Company or any of its Subsidiaries, in whole or in part; provided that:
(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Debt does not exceed the principal amount and premium, if any, plus accrued interest (or accreted value, if applicable) of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of any fees and expenses Incurred in connection therewith);
(2) such Permitted Refinancing Debt has a final scheduled maturity date later than the final scheduled maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is (i) subordinated in right of payment to the Notes or the Notes Guarantees, such Permitted Refinancing Debt is subordinated in right of payment to, the Notes or any Notes Guarantees on terms at least as favorable to the holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, (ii) secured by Liens on any of the Collateral junior in priority to the Liens securing the Notes or the Notes Guarantees, such Permitted Refinancing Debt is either unsecured or secured by Liens on any of the Collateral junior in priority to the Liens securing the Notes or the Notes Guarantees on terms at least as favorable to the holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded or (iii) unsecured, such Permitted Refinancing Debt is unsecured; and
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(4) such Indebtedness is incurred either by the Company or by the Subsidiary of the Company that is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded or would otherwise be permitted to Incur such Indebtedness.
“Person” means any individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, association, estate, organization, joint venture or other entity, or a government or any agency or political subdivision or agency thereof.
“Pledge Agreement” means the Pledge Agreement, dated as of the Issue Date, among the Company and the Guarantors in favor of the Collateral Agent, as amended or supplemented from time to time in accordance with its terms.
“Preferred Stock” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.
“Private Placement Legend” means the legend set forth in Section 2.06(g)(1).
“QIB” means a “qualified institutional buyer” as defined in Rule 144A.
“Qualified Receivables Facility” means any Indebtedness incurred in connection with a Qualified Receivables Transaction. Each of the Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility, as in effect on the Issue Date, shall constitute a Qualified Receivables Facility.
“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by the Company or any of the Subsidiaries pursuant to which the Company or any of the Subsidiaries may sell, convey or otherwise transfer to:
(1) a Receivables Entity (in the case of a transfer by the Company or any of the Subsidiaries); or
(2) any other Person (in the case of a transfer by a Receivables Entity),
or may grant a security interest in, any loans receivable (whether now existing or arising in the future) of the Company or any of the Subsidiaries, and any assets related thereto, including all collateral securing such loans receivable, all contracts and all Guarantees or other obligations in respect of such loans receivable, proceeds of such loans receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving loans receivable or refinancings thereof; provided, however, that the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the chief financial officer of the Company).
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For the avoidance of doubt, each of the transactions contemplated by each of the Existing Heights SPV Facility, the Existing First Heritage SPV Facility, the Existing Revolving Canada SPV Facility, the Existing Flexiti Securitization Notes and the Existing Flexiti SPV Facility (each as in effect on the Issue Date (after giving effect to the Issue Date SPV Amendments)) is a “Qualified Receivables Transaction.”
“Receivables Entity” means (a) a Wholly-Owned Subsidiary of the Company or (b) another Person engaging in a Qualified Receivables Transaction with the Company, in each case, that engages in no activities other than in connection with the financing of loans receivables and is designated by the Board of Directors of the Company (as provided below) as a Receivables Entity, and in either of clause (a) or (b):
(1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of such entity:
(A) is Guaranteed by the Company or any Subsidiary of the Company (excluding Guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings),
(B) is recourse to or obligates the Company or any Subsidiary of the Company in any way (other than pursuant to Standard Securitization Undertakings), or
(C) subjects any property or asset of the Company or any Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof (other than pursuant to Standard Securitization Undertakings);
(2) the entity is not an Affiliate of the Company or is an entity with which neither the Company nor any Subsidiary of the Company has any material contract, agreement, arrangement or understanding other than on terms that the Company reasonably believes to be not materially less favorable to the Company or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company; and
(3) is an entity to which neither the Company nor any Subsidiary of the Company has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing conditions.
Each of Heights Financing I, LLC, First Heritage Financing I, LLC, CURO Canada Receivables GP, Inc., CURO Canada Receivables Limited Partnership, Flexiti Securitization General Partner, Inc., Flexiti Securitization Limited Partnership and Flexiti Financing SPE Corp. is deemed to have been designated as a Receivables Entity as of the Issue Date.
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“Regulation S” means Regulation S promulgated under the Securities Act.
“Regulation S Global Note” means a Global Note in the form of Exhibit A bearing the Global Note Legend and the Restricted Security Legend and deposited with or on behalf of the Depositary and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903.
“Required Ad Hoc Group Lenders” means, as of any date of determination, Lenders (under, and as defined in, the Credit Agreement) in the Ad Hoc Group holding more than 50% of the sum of the aggregate Exposure (under, and as defined in, the Credit Agreement) of all such Lenders in the Ad Hoc Group.
“Required Term Lenders” means, as of any date of determination, Credit Agreement Lenders holding more than 50% of the sum of the aggregate Exposure (as defined in the Credit Agreement) of all Credit Agreement Lenders; provided that “Required Lenders” shall always include at least two Credit Agreement Lenders if there are two or more Credit Agreement Lenders.
“Responsible Officer” when used with respect to the Trustee or Collateral Agent, means any officer or employee within the Corporate Trust Office of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject, and who shall, in each case, have direct responsibility for the administration of this Indenture.
“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.
“Restricted Global Note” means a Global Note bearing the Private Placement Legend.
“Restricted Investment” means an Investment other than a Permitted Investment.
“Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.
“Rule 144” means Rule 144 promulgated under the Securities Act.
“Rule 144A” means Rule 144A under the Securities Act.
“Rule 903” means Rule 903 promulgated under the Securities Act.
“Rule 904” means Rule 904 promulgated under the Securities Act.
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“SEC” means the Securities and Exchange Commission, or any successor agency thereto.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“Security Agreement” means the Security Agreement, dated as of the Issue Date, among the Company and the Guarantors in favor of the Collateral Agent, as amended or supplemented from time to time in accordance with its terms.
“Servicer Account” means any deposit account or securities account used as a collection account for loans receivable contributed or sold to the applicable Receivables Entity that is periodically swept to a zero balance or subject to a requirement to transfer collections therefrom on a periodic basis.
“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Issue Date.
“Similar Business” means any business conducted or proposed to be conducted by the Company and its Subsidiaries on the Issue Date or any business that is similar, reasonably related, incidental, complementary or ancillary thereto, or a reasonable extension or expansion thereof.
“Standard Securitization Undertakings” means representations, warranties, covenants and indemnities entered into by the Company or any Subsidiary of the Company that, taken as a whole, are customary for a non-recourse loans receivable financing transaction.
“Stated Maturity” when used with respect to any security or any installment of interest thereon, means the date specified in such security as the fixed date on which the principal of such security or such installment of interest is due and payable.
“Subsidiary” of any Person means:
(1) any corporation of which more than 50% of the outstanding shares of Capital Stock having ordinary voting power for the election of directors is owned directly or indirectly by such Person; and
(2) any partnership, limited liability company, association, joint venture, business trust or other entity in which such Person, directly or indirectly, has at least a majority ownership interest entitled to vote at the election of directors, managers or trustees thereof (or other person performing similar functions).
Except as otherwise indicated herein, references to Subsidiaries shall refer to Subsidiaries of the Company.
“TIA” means the Trust Indenture Act of 1939 (15 U.S.C §§ 77aaa-77bbbb), as in force on the Issue Date; provided, however, that in the event that the Trust Indenture Act of 1939 is amended after such date, “TIA” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.
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“Treasury Rate” means, at any redemption date, the yield to maturity as of such redemption date of constant maturity United States Treasury securities (as compiled and published in the most recent Federal Reserve Statistical Release H. 15 (519) that has become publicly available at least two Business Days prior to such redemption date (or, if such statistical release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to August 1, 2024; provided, however, that if no published maturity exactly corresponds with such date, then the Treasury Rate shall be interpolated or extrapolated on a straight-line basis from the arithmetic mean of the yields for the next shortest and next longest published maturities; provided further, however, that if the period from such redemption date to August 1, 2024, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
“Trustee” means U.S. Bank Trust Company, National Association, in its capacity as Trustee, until a successor or assign replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor or assign serving hereunder.
“Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.
“Unrestricted Global Note” means a Global Note that does not bear and is not required to bear the Private Placement Legend.
“Unrestricted Cash” means, with respect to any Person(s), cash or Cash Equivalents of such Person(s) that would not appear as “restricted” on a consolidated balance sheet of such Person(s).
“U.S. Government Obligation” means:
(1) any security which is: a direct obligation of the United States of America the payment of which the full faith and credit of the United States of America is pledged or an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally Guaranteed as a full faith and credit obligation of the United States of America, which, in either case, is not callable or redeemable at the option of the issuer thereof; and
(2) any depository receipt issued by a bank (as defined in the Securities Act) as custodian with respect to any U.S. Government Obligation and held by such bank for the account of the holder of such depository receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depository receipt.
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“U.S. Person” means a U.S. Person as defined in Rule 902(k) under the Securities Act.
“Voting Stock” of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.
“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (A) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (B) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by
(2) the then outstanding principal amount of such Indebtedness.
“Wholly-Owned Subsidiary” of any Person means a Subsidiary of such Person all of the outstanding Capital Stock of which (other than directors’ qualifying shares and nominal amounts required to be held by local nationals) shall at the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person (or any combination thereof).
Section 1.02 Other Definitions.
| Term | Defined in Section |
| “Action” | 13.10 |
| “Affiliate Transaction” | 5.11 |
| “Asset Sale Offer” | 5.10 |
| “Authentication Order” | 2.02 |
| “Change of Control Offer” | 5.14 |
| “Change of Control Payment” | 5.14 |
| “Change of Control Payment Date” | 5.14 |
| “Company” | Recitals |
| “Covenant Defeasance” | 9.03 |
| “Custodian” | 7.01 |
| “Event of Default” | 7.01 |
| “Excess Proceeds” | 5.10 |
| “Initial Notes” | Recitals |
| “Legal Defeasance” | 9.02 |
| “Moody’s” | Definition of Cash Equivalents |
| “New Guarantor” | 11.02 |
| “Notes” | Recitals |
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| “Offer Amount” | 3.09 |
| “Offer Period” | 3.09 |
| “Paying Agent” | 2.03 |
| “Payment Default” | 7.01 |
| “Permitted Debt” | 5.09 |
| “Platform” | 5.04 |
| “Premises” | 5.21 |
| “Purchase Date” | 3.09 |
| “Registrar” | 2.03 |
| “Restricted Payments” | 5.07 |
| “S&P” | Definition of Cash Equivalents |
Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. Except as expressly provided herein, the provisions of the TIA shall not apply hereto. All other terms used in this Indenture that are defined by the TIA, defined by the TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(3) “or” is not exclusive;
(4) “including” means including without limitation;
(5) words in the singular include the plural, and in the plural include the singular;
(6) provisions apply to successive events and transactions;
(7) “will” shall be interpreted to express a command;
(8) references to sections of or rules under the Securities Act, Exchange Act or TIA shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;
(9) references to any statute, law or regulation shall be deemed to refer to the same as from time to time amended and in effect and to any successor statute, law or regulation;
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(10) references to the date the Notes were originally issued shall refer to the Issue Date;
(11) “herein,” “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; and
(12) all references to Articles, Sections or subdivisions refer to Articles, Sections or subdivisions of this Indenture unless otherwise indicated.
ARTICLE 2
The Notes
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee’s certificate of authentication will be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note will be dated the date of its authentication. The Notes shall be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The Notes shall bear interest and be payable upon the terms as set forth in Exhibit A.
The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially in the form of Exhibit A hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form will be substantially in the form of Exhibit A hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Note Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream will be applicable to transfers of beneficial interests in the Regulation S Global Note that are held by Participants through Euroclear or Clearstream.
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Section 2.02 Execution and Authentication.
At least one Officer of the Company must sign the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company signed by an Officer of the Company (an “Authentication Order”), authenticate Notes for original issue up to the aggregate principal amount of the Notes that may be validly issued under this Indenture including (i) Initial Notes for original issuance in an aggregate principal amount of $682,298,000 and (ii) subject to compliance with Sections 2.14 and 5.09, any Additional Notes for original issuance from time to time after the date hereof.
All Notes issued under this Indenture (including Additional Notes) shall be treated as a single class of securities under this Indenture, including for purposes of any vote, consent, waiver or other act of Holders.
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. Until the Trustee receives notice of the Company’s appointment of another entity as Registrar or Paying Agent, the Trustee will act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints DTC to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Note Custodian.
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Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary of the Company) will have no further liability for the money. If the Company or a Subsidiary of the Company acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If the Trustee is not the Registrar, the Company will furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders.
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. Any Global Note will be exchanged by the Company for Definitive Notes if:
(1) the Depositary (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Note or (b) has ceased to be a clearing agency registered under the Exchange Act and, in either case, the Company fails to appoint a successor depositary within 90 days thereafter;
(2) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes; or
(3) there has occurred and is continuing a Default or Event of Default with respect to the Notes and the Depositary has requested that Definitive Notes be issued.
Upon the occurrence of any of the preceding events described in subparagraphs (1), (2) or (3) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b) or (c).
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(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1), the transferor of such beneficial interest must deliver to the Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and
(ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (i) above.
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Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee will adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h).
(3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a beneficial interest in the AI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(2) and the Registrar receives the following:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or
(B) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to this clause (4) at a time when an Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to this clause (4).
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Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events described in paragraph (1), (2) or (3) of Section 2.06(a) and receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h), and the Company will execute and the Trustee will, upon receipt of an Authentication Order, authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.
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(2) [Reserved].
(3) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events described in paragraph (1), (2) or (3) of Section 2.06(a) and only if the Registrar receives the following:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
(B) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(4) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events described in paragraph (1), (2) or (3) of Section 2.06(a) and satisfaction of the conditions set forth in Section 2.06(b)(2), the Trustee will cause the aggregate principal amount of the applicable Unrestricted Global Note to be reduced accordingly pursuant to Section 2.06(h), and the Company will execute and the Trustee will, upon receipt of an Authentication Order, authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will not bear the Private Placement Legend.
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(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the AI Global Note.
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(2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:
(A) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or
(B) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this clause (2), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions in this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to clause (2) above or this clause (3) at a time when an Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).
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(1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:
(A) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or
(B) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.
(f) [Reserved]
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(g) Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS A NON-U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO SUCH PURCHASER IN THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, OR (C) IT IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501 UNDER THE SECURITIES ACT AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD WITH RESPECT TO RESTRICTED SECURITIES SET FORTH IN RULE 144 UNDER THE SECURITIES ACT, ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO IT IN THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, (D) TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S, OR REGISTRAR’S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR REGISTRAR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD WITH RESPECT TO RESTRICTED SECURITIES SET FORTH IN RULE 144 UNDER THE SECURITIES ACT.”
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(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2) or (e)(3) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) will not bear the Private Placement Legend.
(2) Global Note Legend. Each Global Note will bear a legend in substantially the following form:
“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”
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(h) Cancellation or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 or at the Registrar’s request.
(2) No service charge will be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 5.10, 5.14, and 10.04).
(3) Neither the Trustee nor the Registrar will be required to register the transfer of or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
(5) Neither the Registrar, the Trustee nor the Company will be required:
(A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 10 days before the day of any selection of Notes for redemption under Section 3.02 and ending at the close of business on the day of selection;
(B) to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.
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(6) Prior to due presentment for the registration of a transfer of any Note, the Trustee, the Registrar, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, the Registrar, any Agent or the Company will be affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02.
(8) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.
(9) The Trustee and the Registrar shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
(10) Neither the Trustee, any Agent nor any agent of the Trustee will have any responsibility for any actions taken or not taken by the Depositary.
(11) Neither the Trustee nor any Agent will have responsibility or obligation to any Participant or Indirect Participant or any other Person with respect to the accuracy of the books or records, or the acts or omissions, of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any Participant or Indirect Participant or other Person (other than the Depositary) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the Applicable Procedures. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its Participants or Indirect Participants.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company or if the Trustee receives credible evidence of the destruction, loss or theft of any Note, the Company will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s standard requirements are met. If required by the Trustee or the Company, an indemnity bond or other indemnity or security must be supplied by the Holder that is sufficient in the judgment of the Trustee determined for itself and the Company determined for itself to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note.
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Every replacement Note is an additional obligation of the Company and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary of the Company or an Affiliate thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee knows are so owned will be so disregarded. Upon request of the Trustee, the Company will furnish to the Trustee promptly an Officer’s Certificate listing and identifying all Notes, if any, known by the Company to be owned or held by or for the account of any of the above described Persons, and the Trustee will be entitled to accept and rely upon such Officer’s Certificate as conclusive evidence of the facts therein set forth and of the fact that all Notes not listed therein are outstanding for the purpose of any determination.
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Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Company will prepare and the Trustee will, upon receipt of an Authentication Order, authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will dispose of canceled Notes in accordance with the Trustee’s standard procedures (subject to the record retention requirement of the Exchange Act and the Trustee’s customary procedures). Certification of such disposal of all canceled Notes will be delivered to the Company upon request. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 5.01. The Company will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) will send or cause to be sent to Holders a notice prepared by the Company that states the special record date, the related payment date and the amount of such interest to be paid.
Section 2.13 CUSIP Numbers.
The Company in issuing the Notes may use CUSIP, ISIN or other numbers, if then generally in use, and thereafter the Company and the Trustee may use such numbers in any notice issued pursuant to this Indenture, including any notice of redemption, provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption or other notice and that reliance may be placed only on the other identification numbers printed on the Notes, and any such notice or notice of redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the CUSIP, ISIN or other numbers.
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Section 2.14 Issuance of Additional Notes.
The Company will be entitled, from time to time, subject to its compliance with Section 5.09, without consent of the Holders, to issue Additional Notes under this Indenture with identical terms as the Initial Notes other than with respect to (i) the date of issuance, (ii) the issue price, (iii) the amount of interest payable on the first interest payment date and (iv) any adjustments in order to conform to and ensure compliance with the Securities Act (or other applicable securities laws) or to reflect differences with respect to original issue discount for U.S. federal income tax purposes.
With respect to any Additional Notes, the Company will set forth in an Officer’s Certificate pursuant to a resolution of the Board of Directors of the Company, copies of which shall be delivered to the Trustee, the following information:
(i) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture; and
(ii) the issue price, the issue date and the CUSIP number of such Additional Notes and the date on which interest on such Additional Notes shall begin to accrue.
ARTICLE 3
Redemption and Prepayment
Section 3.01 Notices to Trustee. If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07, it shall furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, and prior to sending the notice pursuant to Section 3.03, an Officer’s Certificate setting forth (i) the subsection of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price. If the redemption price is not known at the time such notice is to be given, the actual redemption price, calculated as described in this Indenture or the terms of the Notes to be redeemed, will be set forth in an additional Officer’s Certificate of the Company delivered to the Trustee no later than two Business Days prior to the redemption date.
Section 3.02 Selection of Notes to be Redeemed. If less than all of the Notes are to be redeemed at any time, selection of Notes for redemption shall be made in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by lot to the extent practicable or by such other method in accordance with the Applicable Procedures of the Depositary; provided that no Notes of $2,000 or less shall be redeemed in part. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 10 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.
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In the case of Definitive Notes, the Trustee will promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in minimum amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. A new Note in principal amount equal to the unredeemed portion thereof shall be issued (or book-entry notation made) in the name of the Holder thereof upon cancellation of the original Note. On and after the redemption date, unless the Company defaults in the payment of the redemption price, interest shall cease to accrue on the principal amount of the Notes or portions thereof called for redemption and for which funds have been set aside for payment. Except as provided in this Section 3.02, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.
Section 3.03 Notice of Redemption. Subject to the provisions of Sections 3.09 and 5.14, at least 10 but not more than 60 days before the redemption date, the Company will send or caused to be sent, by first class mail or other electronic means reasonably satisfactory to the Trustee, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed or sent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture.
The notice shall be prepared by the Company, shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is to be redeemed in part only, the portion of the principal amount thereof to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;
(h) if such redemption is subject to satisfaction of one or more conditions precedent, such notice shall describe each such condition, and if applicable, such notice shall state that, in the Company’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied or waived, and shall state that such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date so delayed; and
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(i) the CUSIP number; provided that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company’s written request, the Trustee will give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company will have delivered to the Trustee, at least five days prior to the redemption date, an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph (or such shorter period reasonably acceptable to the Trustee).
If any of the Notes to be redeemed are in the form of a Global Note, then the Company may modify such notice to the extent necessary to comply with the Applicable Procedures of the Depositary.
Section 3.04 Effect of Notice of Redemption. Once notice of redemption is sent in accordance with Section 3.03, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price unless such redemption is subject to the satisfaction of one or more conditions precedent as described in the immediately succeeding sentence. Notice of any redemption upon any Equity Offering or other securities offering or financing, or in connection with a transaction (or series of related transactions) that constitute a Change of Control, may, in the Company’s discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering, securities offering, financing or Change of Control. In addition, the Company may provide in such notice that payment of the redemption price and performance of the Company’s obligations with respect to such redemption may be performed by another Person.
Section 3.05 Deposit of Redemption Price. Prior to 10:00 a.m., New York City time, on the redemption date, the Company will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price and accrued interest on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price and accrued interest on all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 5.01.
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Section 3.06 Notes Redeemed in Part. If any Note is to be redeemed in part only, the notice of redemption sent pursuant to Section 3.03 that relates to such Note shall state the portion of the principal amount of that Note to be redeemed. Upon receipt of an Authentication Order, the Trustee will (i) cancel the original Note and (ii) authenticate for the Holder at the expense of the Company a new Note in principal amount equal to the unredeemed portion of the original Note in the name of the Holder thereof, or in the case of a Global Note make such notation on its books and records.
Section 3.07 Optional Redemption. (a) On and after August 1, 2024, the Company may on one or more occasions redeem the Notes, in whole or in part, upon notice pursuant to Section 3.03, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest to the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on August 1 of each of the years set forth below.
| Year | Percentage | |||
| 2024 | 103.750 | % | ||
| 2025 | 101.875 | % | ||
| 2026 and thereafter | 100.000 | % | ||
(b) Prior to August 1, 2024, the Company may, upon notice pursuant to Section 3.03, redeem up to 40% of the aggregate principal amount of the Notes (including Additional Notes) issued under this Indenture at a redemption price of 107.500% of the principal amount of the Notes redeemed, plus accrued and unpaid interest to the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date) if:
(1) such redemption is made with the proceeds of one or more Equity Offerings;
(2) at least 50% of the aggregate principal amount of the Notes (including Additional Notes) issued under this Indenture remain outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company or any of its Subsidiaries); and
(3) the redemption occurs within 180 days of such Equity Offering.
(c) Prior to August 1, 2024, the Company may, upon notice pursuant to Section 3.03, redeem up to 10% of the aggregate principal amount of the Notes (including Additional Notes) issued under the Indenture during each 12-month period following the Issue Date at a redemption price of 103% of the principal amount of the Notes redeemed, plus accrued and unpaid interest to the redemption date (subject to the right of holders of the Notes on the relevant record date to receive interest due on the relevant interest payment date).
(d) Prior to August 1, 2024, the Company may redeem the Notes, in whole or in part, upon notice pursuant to Section 3.03, at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).
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(e) Notwithstanding the foregoing, in connection with any tender offer for the Notes, including a Change of Control Offer or an Asset Sale Offer, if Holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in such tender offer and the Company, or any third party making such tender offer in lieu of the Company as described above, repurchases all of the Notes validly tendered and not withdrawn by such Holders, the Company or such third party will have the right, upon notice pursuant to Section 3.03 (provided that such notice is given not more than 30 days following such repurchase), to redeem all notes that remain outstanding following such purchase at a price equal to the price paid to each other Holder in such tender offer (which may be less than par) plus accrued and unpaid interest on the notes redeemed, to the applicable redemption date (subject to the rights of Holders of Notes on any relevant record date to receive interest due on the relevant interest payment date).
(f) Any redemption pursuant to this Section 3.07 or the last paragraph of Section 5.14 shall be made pursuant to the provisions of Section 3.01 through 3.06.
Section 3.08 Mandatory Redemption. Except as set forth in Sections 5.10 and 5.14, the Company will not be required to make mandatory redemption or sinking fund payments or offers to purchase with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds. In the event that, pursuant to Section 5.10, the Company will be required to commence an Asset Sale Offer, it shall follow the procedures specified in this Section 3.09.
The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than five Business Days after the termination of the Offer Period (the “Purchase Date”), the Company will purchase the principal amount of Notes required to be purchased pursuant to Section 5.10 (the “Offer Amount”). Payment for any Notes so purchased shall be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by first class mail or other electronic means reasonably satisfactory to the Trustee, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 5.10 and the length of time the Asset Sale Offer shall remain open;
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(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may only elect to have Notes in minimum denominations of $2,000, or integral multiples of $1,000 in excess thereof (unless such amount represents the entire principal amount of Notes held by such Holder), purchased;
(f) that Holders electing to have any Notes purchased pursuant to any Asset Sale Offer shall be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent or the Depositary, as applicable, at the address specified in the notice prior to the close of business on the third Business Day preceding the Purchase Date, subject to the Applicable Procedures;
(g) that Holders shall be entitled to withdraw their election if the Paying Agent or the Depositary, as applicable, receives, not later than the close of business on the third Business Day preceding the Purchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing its election to have such Note purchased, subject to the Applicable Procedures;
(h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Trustee will select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes in minimum denominations of $2,000, or integral multiples of $1,000 in excess thereof, shall be purchased), subject to the Applicable Procedures; and
(i) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).
If any of the Notes subject to the Asset Sale Offer are in the form of a Global Note, then the Company may modify such notice to the extent necessary to comply with the Applicable Procedures of the Depositary.
On or before the Purchase Date, subject to the Applicable Procedures and the Intercreditor Agreements, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer (and not withdrawn), or, if less than the Offer Amount has been validly tendered, all Notes tendered (and not withdrawn), and shall deliver to the Trustee an Officer’s Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Paying Agent shall promptly (but in any case not later than five Business Days after the Purchase Date) send or deliver to each tendering Holder an amount received from the Company equal to the purchase price of the Notes validly tendered by such Holder and accepted by the Company for purchase, and the Company will promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and send (or cause to be transferred by book-entry) such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly sent (or caused to be transferred by book-entry) by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Sale Offer promptly after the Purchase Date.
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Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06.
Section 3.10 [Reserved]
Section 3.11 Company May Acquire Notes. The Company or its Affiliates (or any Person acting on behalf of the Company or its Affiliates) may at any time and from time to time acquire the Notes by means other than redemption, including by tender offer, open market purchases, negotiated transactions or otherwise, so long as such acquisition is not prohibited by applicable securities laws or regulations or the terms of this Indenture. In accordance with, and subject to, Section 2.11, the Company may deliver such acquired Notes to the Trustee for cancellation.
ARTICLE 4
Satisfaction and Discharge
Section 4.01 Satisfaction and Discharge. This Indenture will be discharged and will cease to be of further effect as to all outstanding Notes issued hereunder (except Sections 2.06, 2.07, 2.08, 8.01, 8.02, 8.07, 12.07, 12.15 and 13.11), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture if:
(a) either:
(i) the Company will have paid or caused to be paid the principal of, premium, if any, and interest as and when the same shall have become due and payable;
(ii) all outstanding Notes (other than Notes which have been lost, stolen or destroyed and which have been replaced or paid as provided in Section 2.07) have been delivered to the Trustee for cancellation; or
(iii) all Notes not theretofore delivered to the Trustee for cancellation (i) have become due and payable by reason of the sending of a notice of redemption or (ii) (A) shall become due and payable at their Stated Maturity within one (1) year or (B) are to be called for redemption within one (1) year under arrangements reasonably satisfactory to the Trustee, and the Company has irrevocably deposited or caused to be deposited with the Trustee funds in trust of cash in U.S. dollars, non-callable U.S. Government Obligations, or a combination thereof in an amount sufficient to pay and discharge the principal, premium, if any, and interest on the Notes to the date of Stated Maturity or such redemption, as the case may be;
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(b) the Company has paid all other sums payable by it under the Indenture Documents; and
(c) the Company has delivered an Officer’s Certificate and an Opinion of Counsel (which opinion of counsel may be subject to customary assumptions and exclusions) stating that all conditions for the satisfaction and discharge have been met.
Section 4.02 Application of Trust Money. Subject to the provisions of the last paragraph of Section 9.05, all money deposited with the Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent), to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such funds need not be segregated from other funds except to the extent required by law.
ARTICLE 5
Covenants
Section 5.01 Payment of Notes. The Company will pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. New York City time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.
The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and installments of interest (without regard to any applicable grace period) at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful.
The Company will be responsible for making calculations called for under the Notes, including, but not limited to, determination of redemption price, premium, if any, and other amounts payable on the Notes, if any. The Company will make the calculations in good faith and, absent manifest error, its calculations will be final and binding on the Holders. The Company will provide a schedule of its calculations to the Trustee when applicable, and the Trustee is entitled to rely conclusively on the accuracy of the Company’s calculations without independent verification.
Section 5.02 Maintenance of Office or Agency. The Company will maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company will fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.
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The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee one such office or agency of the Company.
Section 5.03 Reports. So long as any Notes are outstanding, the Company will furnish to the Holders or cause the Trustee to furnish to the Holders:
(1) within 90 days after the end of each fiscal year of the Company, all annual financial statements of the Company for such fiscal year that would be required to be contained in a filing with the SEC on Form 10 K if the Company were required to file such Form, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries and a report on the annual financial statements by the Company’s certified independent accountants;
(2) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Company, all quarterly financial statements that would be required to be contained in a filing with the SEC on Form 10 Q if the Company were required to file such Form, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries; and
(3) within the time periods required for filing such current reports and form as specified in the SEC’s rule and regulations, all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.
Documents filed by the Company with the SEC via the EDGAR system will be deemed to be furnished to the registered holders at the time such documents are filed.
To the extent any such information is not so filed or furnished, as applicable, within the time periods specified above and such information is subsequently filed or furnished, as applicable, the Company will be deemed to have satisfied its obligations with respect thereto at such time and any Default with respect thereto shall be deemed to have been cured; provided that such cure shall not be permissible following an acceleration in accordance with Section 7.02 hereof and such acceleration shall not have been rescinded or cancelled prior to such cure.
In addition, the Company agrees that, for so long as any Notes remain outstanding, it will use commercially reasonable efforts to hold and participate in quarterly conference calls with holders of Notes, beneficial owners of the Notes and securities analysts to discuss such financial information no later than ten business days after distribution of such financial information (it being understood that such quarterly conference calls may be the same conference calls as with the Company’s equity investors and analysts).
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Furthermore, the Company agrees that, at any time it is not subject to Section 13 or Section 15(d) of the Exchange Act, for so long as any Notes remain outstanding, it will furnish to the holders of Notes, any beneficial owner of the Notes, securities analysts and prospective investors, upon their request, the information and reports described above and any other information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. The Trustee shall have no liability or responsibility for the filing, timeliness or content of any report delivered hereunder and the Trustee shall have no duty to participate in or monitor any investor calls or similar events.
Section 5.04 Compliance Certificate. (a) The Company will deliver to the Trustee, within 120 days after the end of each fiscal year commencing with the fiscal year ending December 31, 2023, an Officer’s Certificate that need not comply with Section 12.03 or 12.04, one signer of which shall be the principal executive officer, principal financial officer, or principal accounting officer of the Company, stating that a review of the activities of the Company and its Affiliates during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Company and the Guarantors have kept, observed, performed and fulfilled their obligations under the Indenture Documents, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge each of the Company and each Guarantor during the preceding fiscal year has kept, observed, performed and fulfilled each and every covenant contained in the Indenture Documents and is not in Default at the date of such certificate in the performance or observance of any of the terms, provisions and conditions of the Indenture Documents (or, if a Default or Event of Default shall have occurred and is continuing, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company or Guarantor is taking or proposes to take with respect thereto).
(b) The Company will, so long as any of the Notes are outstanding, deliver to the Trustee, within ten Business Days of any Officer becoming aware of any Default or Event of Default, an Officer’s Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.
Section 5.05 Taxes. The Company will pay, and will cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments and governmental levies, except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders.
Section 5.06 Stay, Extension and Usury Laws. Each of the Company and the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of the Indenture Documents; and each of the Company and the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.
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Section 5.07 Restricted Payments. (a) The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend on, or make any other payment or distribution in respect of, its Equity Interests (including any dividend or distribution payable in connection with any merger or consolidation involving the Company) or similar payment to the direct or indirect holders thereof in their capacity as such (other than any dividends or distributions payable solely in its Equity Interests (other than Disqualified Stock) and dividends or distributions payable to the Company or any of its Subsidiaries (and, if such Subsidiary has stockholders other than the Company or other Subsidiaries, to its other stockholders on no more than a pro rata basis));
(ii) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company held by any Person or any Equity Interests of any Subsidiary of the Company held by any Affiliate of the Company (in each case other than held by the Company or a Subsidiary of the Company), including in connection with any merger or consolidation and including the exercise of any option to exchange any Equity Interests (other than into Equity Interests of the Company that are not Disqualified Stock);
(iii) make any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to the scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Indebtedness that is contractually subordinated in right of payment to any of the Notes or any Notes Guarantee, any Indebtedness that is secured by Liens on any of the Collateral junior in priority to the Liens securing the Notes or any Notes Guarantee (including for the avoidance of doubt, the Existing Notes) or any unsecured Indebtedness (other than the payment of interest and other than the purchase, repurchase or other acquisition of such Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within ninety days of the date of such purchase, repurchase or other acquisition); provided that, for the avoidance of doubt, this clause (iii) shall not prohibit the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Qualified Receivables Facility by the applicable Receivables Entity or of the Backstop Notes by Loan SPV in accordance with the terms thereof; or
(iv) make any Restricted Investment.
(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”).
(b) The foregoing provisions will not prohibit:
(i) the payment of any dividend or other distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or other distribution or giving of the irrevocable redemption notice, so long as said date is after the Issue Date, if at said date of declaration or notice, such payment would have complied with the provisions of this Indenture;
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(ii) any Restricted Payment made in exchange for, or with the net cash proceeds from, the substantially concurrent sale of Equity Interests of the Company (other than any Disqualified Stock and other than Equity Interests issued or sold to a Subsidiary of the Company) or a substantially concurrent cash capital contribution received by the Company from its shareholders;
(iii) the defeasance, redemption, repurchase, retirement or other acquisition of Indebtedness of the Company or any Guarantor that is contractually subordinated in right of payment to the Notes or to any Notes Guarantee, Indebtedness that is secured by Liens on any of the Collateral junior in priority to the Liens securing the Notes or any Notes Guarantees or unsecured Indebtedness in exchange for, or with the net cash proceeds from, an Incurrence of Permitted Refinancing Debt with respect to such Indebtedness;
(iv) the redemption, repurchase, retirement or other acquisition for value of any Equity Interests of the Company or any Subsidiary of the Company held by current or former employees, officers, directors or consultants of the Company (or any of its Subsidiaries), in each case solely upon such Person’s death, disability, retirement or termination of employment or under the terms of any Pension Plan or other agreement under which such Equity Interests were issued; provided that the aggregate amount of such repurchases and other acquisitions (excluding amounts representing cancellation of Indebtedness) shall not exceed $1.0 million in any Fiscal Year;
(v) payments of dividends on Disqualified Stock issued pursuant to Section 5.09;
(vi) repurchases of Capital Stock deemed to occur upon exercise of stock options if such Capital Stock represents a portion of the exercise price of such options;
(vii) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company; provided, however, that any such cash payment shall not be for the purpose of evading the limitations of this Section 5.07;
(viii) so long as no Default or Event of Default has occurred and is continuing or would be caused thereby, payments of intercompany subordinated Indebtedness, the Incurrence of which was permitted under clause (iv) of Section 5.09(b); or
(ix) the repurchase, redemption or other acquisition or retirement for value of any Indebtedness of the Company or any Guarantor that is contractually subordinated in right of payment to any of the Notes or to any of the Notes Guarantees, any Indebtedness that is secured by Liens on any of the Collateral junior in priority to the Liens securing the Notes or any Notes Guarantees or any unsecured Indebtedness upon the occurrence of an Asset Sale or Change of Control; provided that no such repurchase, redemption or other acquisition or retirement for value of any such Indebtedness shall be permitted until, (i) in the event of a Change of Control, all Notes tendered by each of the holders in connection with a Change of Control Offer have been repurchased, redeemed or acquired for value and (ii) in the event of an Asset Sale, all Notes tendered by holders in connection with any Asset Sale Offer required under Section 5.10(d) shall have been repurchased, redeemed or acquired for value and such repurchase, redemption or other acquisition or retirement for value of any such Indebtedness shall be paid solely with any remaining Net Proceeds of such Asset Sale; and
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(x) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to the scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Indebtedness with respect to a Qualified Receivables Facility.
The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of the Restricted Payment of the assets proposed to be transferred by the Company or such Subsidiary, as the case may be, pursuant to the Restricted Payment.
Notwithstanding anything to the contrary set forth in this Section 5.07, no Company Party shall make any Restricted Payment to, or Investment in, any Subsidiary (other than another Company Party) consisting of any intellectual property or any other assets (other than cash and Cash Equivalents) material to the operations of the Company and its Subsidiaries in the ordinary course of business.
Section 5.08 Dividend and Other Payment Restrictions Affecting Subsidiaries. (a) The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Subsidiary of the Company to:
(i) pay dividends or make any other distributions to the Company or any of its Subsidiaries with respect to its Capital Stock or any other interest or participation in, or measured by, its profits;
(ii) pay any Indebtedness owed to the Company or any of its Subsidiaries;
(iii) make any loans or advances to the Company or any of its Subsidiaries; or
(iv) sell, lease or transfer any of its properties or assets to the Company or any of its Subsidiaries.
(b) However, the foregoing restrictions will not apply to encumbrances or restrictions existing under or by reason of:
(i) any agreements in effect or entered into on the Issue Date, including agreements governing Existing Indebtedness as in effect on the Issue Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof (in each case, regardless of whether such replacement or refinancing is consummated at the same time or later than the termination or repayment of the Indebtedness being refinanced or replaced), in whole or in part; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in the agreements governing such Indebtedness as in effect on the Issue Date;
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(ii) the Credit Agreement, the Existing Notes Indenture Documents and the Backstop Notes, in each case, in effect as of the Issue Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof (in each case, regardless of whether such replacement or refinancing is consummated at the same time or later than the termination or repayment of the Indebtedness being refinanced or replaced) and any additional credit facilities permitted under this Indenture; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or additional credit facilities are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in the Credit Agreement as in effect on the Issue Date;
(iii) the Indenture Documents;
(iv) applicable law and any applicable rule, regulation or order;
(v) customary non-assignment provisions in leases, licenses or other agreements entered into in the ordinary course of business;
(vi) purchase money obligations and Capital Lease Obligations that impose restrictions of the nature described in clause (iv) of Section 5.08(a) on the property so acquired;
(vii) any agreement for the sale or other disposition of all or substantially all of the Capital Stock or assets of a Subsidiary of the Company that restricts distributions by that Subsidiary pending its sale or other disposition thereof;
(viii) any agreement or other instrument of a Person acquired by the Company or any Subsidiary of the Company in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(ix) Liens that limit the right of the Company or any of its Subsidiaries to dispose of the asset or assets subject to such Lien;
(x) customary provisions limiting the disposition or distribution of assets or property in partnership, joint venture, asset sale agreements, stock sale agreements and other similar agreements, which limitation is applicable only to the assets that are the subject of such agreements;
(xi) Permitted Refinancing Debt, provided that the restrictions contained in the agreements governing such Permitted Refinancing Debt are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;
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(xii) any such encumbrance or restriction with respect to any Foreign Subsidiary of the Company pursuant to an agreement governing Indebtedness incurred by such Foreign Subsidiary, (a) if the encumbrances and restrictions contained in any such agreement or instrument taken as a whole are not materially more restrictive to the Company and its Subsidiaries than the encumbrances and restrictions contained in the agreements described in clauses (i) and (ii) above (as determined in good faith by the Company), or (b) if such encumbrance or restriction is not materially more restrictive to the Company and its Subsidiaries than is customary in comparable financings (as determined in good faith by the Company) and either (x) the Company determines in good faith that such encumbrance or restriction will not materially affect the Company’s ability to make the principal or interest payments on the Notes or (y) such encumbrance or restriction applies only if a default occurs in respect of a payment or financial covenant relating to such Indebtedness;
(xiii) any encumbrance or restriction existing under or by reason of contractual requirements of a Receivables Entity in connection with a Qualified Receivables Transaction; provided that such restrictions apply only to such Receivables Entity or any Subsidiary acting as servicer or sub-servicer for such Qualified Receivables Transaction; provided that any such encumbrance or restriction applicable to a Subsidiary acting as servicer or sub-servicer for such Qualified Receivables Transaction shall apply only to Servicer Accounts;
(xiv) restrictions on cash or other deposits or net worth imposed by landlords, suppliers and customers under contracts entered into in the ordinary course of business; and
(xv) any encumbrance or restriction applicable only to Loan SPV existing under or by reason of the organizational documents of Loan SPV or the Backstop Notes, in each case as in existence on the Issue Date.
Section 5.09 Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Debt) and the Company will not issue any Disqualified Stock and will not permit any of its Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock.
(b) The foregoing provisions will not prohibit the Incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(i) the Incurrence by (1) the Company of loans outstanding under the Credit Agreement on the Issue Date in an aggregate principal amount not to exceed $165,000,000 (including fees that are paid in kind and capitalized on the Issue Date) and Guarantees thereof by the Guarantors, (2) the Company of Existing Notes outstanding on the Issue Date (after giving effect to the Exchange) and Guarantees thereof by the Guarantors in an aggregate principal amount not to exceed $317,702,000, and (3) Permitted Refinancing Debt in exchange for, or the net cash proceeds of which are used to extend, refinance, renew, replace, defease or refund (in each case, whether or not upon termination and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities), in whole or in part, the Existing Notes outstanding on the Issue Date (after giving effect to the Exchange);
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(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Notes (other than Additional Notes) and the related Notes Guarantees;
(iii) [reserved;]
(iv) the Incurrence by the Company or any of its Subsidiaries of Permitted Refinancing Debt in exchange for, or the net cash proceeds of which are used to extend, refinance, renew, replace, defease or refund (in each case, whether or not upon termination and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities), in whole or in part, Indebtedness that was Incurred pursuant to subsection (a) above or pursuant to clauses (ii), (iv) or (viii) of this Section 5.09(b);
(v) the Incurrence of intercompany Indebtedness of the Company, a Guarantor or any Subsidiary of the Company (other than a Receivables Entity and other than Loan SPV) for so long as such Indebtedness is not prohibited by Section 5.07; provided that (i) such Indebtedness shall be unsecured and if owing by the Company or any Guarantor, contractually subordinated in all respects to the Notes and any Notes Guarantee, and (ii) if as of any date any Person other than the Company or a Subsidiary owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness (other than Permitted Liens of the type described in clause (1) or (15) of the definition thereof or any permitted refinancing Lien in respect thereof), such date shall be deemed the incurrence of Indebtedness not permitted under this clause (v);
(vi) Guarantees by the Company or any Subsidiary of the Company of Indebtedness of the Company or any Subsidiary of the Company (other than a Receivables Entity and other than Loan SPV) otherwise permitted hereunder so long as the Person giving such Guarantee could have Incurred the Indebtedness that is being Guaranteed; provided that if the Indebtedness being guaranteed (x) is subordinated to the Notes or a Notes Guarantee, then the Guarantee must be subordinated to the same extent as the Indebtedness being guaranteed or (y) is owed by any Subsidiary of the Company that is not a Guarantor, such Guarantee shall be subordinated to the prior payment in full of the Notes in the case of the Company or the Notes Guarantees in the case of a Guarantor;
(vii) the Incurrence by the Company or any of its Subsidiaries of Hedging Obligations that are Incurred for the purpose of fixing or hedging (A) interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) currency exchange risk in connection with existing financial obligations in the ordinary course of business and not for purposes of speculation;
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(viii) the Incurrence on or prior to the Issue Date of Existing Indebtedness (other than Indebtedness described in clauses (i), (ii) or (v) of this Section 5.09(b));
(ix) the Incurrence of obligations in respect of letters of credit, bank guarantees, performance, bid and surety bonds and completion guarantees provided by the Company or any of its Subsidiaries in the ordinary course of business;
(x) the Incurrence by the Company or any of its Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within four Business Days of its Incurrence;
(xi) [reserved;]
(xii) Indebtedness of the Company or any Subsidiary of the Company consisting of the financing of insurance premiums in the ordinary course of business;
(xiii) Indebtedness consisting of promissory notes or similar Indebtedness issued by the Company or any Subsidiary of the Company to current, future or former officers, directors and employees thereof, or to their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or a Subsidiary of the Company to the extent described in clause (iv) of Section 5.07(b);
(xiv) Indebtedness arising from agreements of the Company or any of its Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or such Subsidiary in connection with such disposition;
(xv) Indebtedness Incurred by a Canadian Direct Lending Subsidiary (the borrower in respect of such Indebtedness, the “Canadian Recourse Facility Borrower”) (and any unsecured Guarantee thereof by the Company) with respect to one or more single-pay recourse facilities (and Permitted Refinancing Debt in respect thereof) in an aggregate principal amount outstanding at any one time not in excess of $25.0 million (the “Canadian Recourse Facility”);
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(xvi) Indebtedness Incurred by a Receivables Entity (and Guarantees thereof by the Company or any Subsidiary that constitute Standard Securitization Undertakings) in a Qualified Receivables Transaction either (A) consisting of the Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility in each case in effect as of the Issue Date (after giving effect to the Issue Date SPV Amendments) or as amended or otherwise modified, provided no such amendment or modification directly affecting the rights or obligations of the Company (it being understood that the rights of the Company shall include the capacity and availability (including, without limitation, as a result of any “borrowing base” or similar concept) under such Qualified Receivables Facility) shall be materially adverse to the Company or (B) having terms (including as to advance rates, minimum liquidity, restricted cash and pay-down provisions) either substantially consistent with the terms of the Indebtedness described in subclause (A) of this clause (xvi) or otherwise acceptable to the Required Term Lenders or the Required Ad Hoc Group Lenders (provided that the Required Ad Hoc Group Lenders shall be deemed to have provided such approval unless the Required Ad Hoc Group Lenders shall object thereto by written notice to the Credit Agreement Agent within four (4) Business Days after having received notice thereof); and
(xvii) Indebtedness of Loan SPV consisting of Backstop Notes in an aggregate principal amount not to exceed $[***] and the Guarantee thereof by the Company, provided that such Guarantee shall be unsecured and contractually subordinated in right of payment to the payment in full of the Obligations of the Company under the Credit Agreement.
(c) For purposes of determining compliance with this Section 5.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (i) through (xvii) of paragraph (b) above, the Company will, in its sole discretion, divide and classify such item of Indebtedness in any manner that complies with this Section 5.09 and will only be required to include the amount and type of such Indebtedness in one of such clauses, and may re-classify any such item of Indebtedness from time to time among such clauses, so long as such item meets the applicable criteria for such category. For the avoidance of doubt, Indebtedness may be classified as Incurred in part pursuant to one of the clauses (i) through (xvii) above, and in part under one or more other clauses. Indebtedness outstanding on the Issue Date under each of the Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility shall be treated as Incurred pursuant to clause (xvi) of paragraph (b) above.
(d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.
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(e) The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.
(f) Accrual of interest and dividends, accretion of accreted value, issuance of securities paid-in-kind, the accretion or amortization of original issue discount, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock, the reclassification of commitments or obligations not treated as Indebtedness due to a change in GAAP, changes to amounts outstanding in respect of Hedging Obligations solely as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 5.09.
(g) The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Notes Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured or by virtue of being secured on a junior Lien priority basis.
(h) Notwithstanding anything to the contrary herein or otherwise, the Company will not Incur, and will not permit any of its Subsidiaries to Incur, any Indebtedness, any proceeds of which are used, directly or indirectly, to repay, prepay, refinance or replace in any way the obligations under the Credit Agreement.
Section 5.10 Asset Sales. (a) The Company will not, and will not permit any of its Subsidiaries to, make any Asset Sale (except with respect to an Event of Loss) or any Disposition excluded from the definition of “Asset Sale” pursuant to clause (xv)(A) of such definition unless:
(i) the Company or the Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and
(ii) at least 75% of the consideration therefor received by the Company or such Subsidiary is in the form of cash or Cash Equivalents;
provided that the amount of:
(1) any liabilities (as shown on the Company’s or such Subsidiary’s most recent balance sheet) of the Company or any Subsidiary of the Company (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Notes Guarantee) that are assumed by the transferee of any such assets and with respect to which the Company or such Subsidiary is unconditionally released from further liability;
(2) any notes or other obligations or other securities received by the Company or such Subsidiary from such transferee that are converted by the Company or such Subsidiary into cash or Cash Equivalents within 45 days after receipt thereof (to the extent of the cash or Cash Equivalents received in that conversion); and
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(3) any Designated Non-Cash Consideration received by the Company or any such Subsidiary in such Asset Sale; provided that at the time of receipt of such Designated Non-Cash Consideration, the aggregate Fair Market Value of all Designated Non-Cash Consideration (with the Fair Market Value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value), less the amount of Net Proceeds previously realized in cash or Cash Equivalents from the sale of previously received Designated Non-Cash Consideration is less than $25.0 million,
will be deemed to be cash for purposes of this Section 5.10.
(b) Subject to the Intercreditor Agreements, within 90 days after the receipt of any Net Proceeds from an Asset Sale by the Company or a Subsidiary of the Company, the Company or such Subsidiary may apply such Net Proceeds, at its option, to (i) permanently reduce Indebtedness under the Credit Agreement (and, to the extent applicable, to correspondingly reduce commitments with respect thereto) and (ii) after all Indebtedness under the Credit Agreement is repaid in full pursuant to the preceding clause (i), use any remaining Net Proceeds to make an Asset Sale Offer (as defined below) to all holders of Notes to purchase from such holders on a ratable basis the maximum principal amount of Notes that may be purchased out of such remaining Net Proceeds pursuant to the terms of this Section 5.10 or to elect to redeem the Notes pursuant to the optional redemption provisions of Section 3.07.
(c) Subject to the Intercreditor Agreements, pending the final application of any such Net Proceeds, the Company or a Subsidiary of the Company may temporarily invest such Net Proceeds in any manner that is not prohibited by this Indenture.
(d) Subject to the Intercreditor Agreements, any Net Proceeds from Asset Sales that are not applied (by election or as a result of the passage of time) as provided in the first sentence of the preceding paragraph will be deemed to constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $10 million, the Company will be required to make an offer (an “Asset Sale Offer”) to all holders of Notes to purchase from such holders on a ratable basis the maximum principal amount of Notes that may be purchased out of the Excess Proceeds. The offer price for such Asset Sale Offer shall be an amount in cash equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in this Indenture. To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company and its Subsidiaries may use any remaining Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by holders thereof exceeds the amount of the Excess Proceeds, the Trustee will select the Notes to be purchased on a pro rata basis based upon the principal amount of Notes tendered (subject to adjustments so that no Notes in an unauthorized denomination are repurchased in part). Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero. Notes (or portions thereof) purchased pursuant to an Asset Sale Offer will be cancelled and may not be reissued.
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(e) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of, and Rule 14e-1 under, the Exchange Act and any other securities laws and regulations thereunder in connection with the repurchase of the Notes as a result of an Asset Sale. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture (including Section 3.09), the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by virtue of its compliance with such securities laws or regulations.
(f) Notwithstanding anything to the contrary contained in this Section 5.10, the Company and its Subsidiaries shall not consummate Asset Sales (other than Events of Loss) to persons other than the Company and its Subsidiaries of assets with an aggregate Fair Market Value since the Issue Date in excess of $5 million without the prior written consent of the Required Ad Hoc Group Lenders.
Section 5.11 Transactions with Affiliates. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, exchange, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any contract, agreement, understanding, loan, advance or Guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an “Affiliate Transaction”) involving aggregate consideration in excess of $1.0 million, unless:
(a) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Subsidiary than those that would have been obtained in a comparable transaction at the time in an arm’s-length transaction with a person who was not an Affiliate; and
(b) if such Affiliate Transaction involves an amount in excess of $2 million, the terms of the Affiliate Transaction are set forth in writing and a majority of the non-employee directors of the Company disinterested with respect to such Affiliate Transaction has determined in good faith that the criteria set forth in clause (a) of this Section 5.11 are satisfied and has approved the relevant Affiliate Transaction as evidenced by a resolution of the Board of Directors of the Company set forth in an Officer’s Certificate.
The foregoing provisions will not apply to the following:
(i) any employment agreement or compensation plan or arrangement and other benefits (including retirement, health, stock option and other benefit plans) entered into by the Company or any of its Subsidiaries in the ordinary course of business of the Company or such Subsidiary;
(ii) transactions exclusively between or among the Company Parties; provided that such transactions are not otherwise prohibited by the Indenture Documents;
(iii) any agreement existing on the Issue Date, as in effect on the Issue Date, or as modified, amended or amended and restated by any modification, amendment or amendment and restatement (x) that, taken as a whole, is not more disadvantageous to the holders of the Notes in any material respect than such agreement as it was in effect on the Issue Date or (y) made in compliance with the applicable provisions of clauses (a) and (b) of this Section 5.11;
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(iv) reasonable compensation of, and indemnity arrangements in favor of, directors of the Company and its Subsidiaries;
(v) the issuance or sale of any Equity Interests (other than Disqualified Stock) of the Company and any contribution to the common equity of the Company;
(vi) the issuance of loans under the Credit Agreement on the Issue Date in an aggregate initial principal amount equal to $[***] to Loan SPV and the guarantee thereof by the Company; provided that such guarantee shall be unsecured and contractually subordinated in right of payment to the payment in full of the Indenture Obligations of the Company;
(vii) transactions with customers, clients, lessors, landlords, suppliers, contractors, or purchasers or sellers of goods or services that are Affiliates, in each case, in the ordinary course of business and otherwise in compliance with the terms of this Indenture that are fair to the Company and its Subsidiaries, in the reasonable determination of the Board of Directors of the Company;
(viii) sales or other transfers or dispositions of accounts receivable and other related assets customarily transferred in an asset securitization transaction involving accounts receivable to a Receivables Entity in a Qualified Receivables Transaction, and acquisitions of Permitted Investments in connection with, and any other customary transactions effected as a part of, a Qualified Receivables Transaction; and
(ix) Restricted Payments that are permitted by Section 5.07 and Permitted Investments.
Section 5.12 Liens. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind on any asset now owned or hereafter acquired, except Permitted Liens.
Section 5.13 Corporate Existence; Maintenance of Property and Insurance. Subject to Section 5.10 and Article 6, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary and (ii) the material rights (charter and statutory), licenses and franchises of the Company and each of its Subsidiaries; provided, however, that the Company will not be required to preserve any such material right, license or franchise, or the corporate, partnership or other existence of a Subsidiary of the Company, if the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders.
The Company will, and will cause each of its Subsidiaries to, keep all property material to the operation of the business of the Company and its Subsidiaries, taken as a whole, in good working order and condition in all material respects, ordinary wear and tear and casualty loss excepted; provided, that the Company will not be obligated to comply with this paragraph to the extent that the failure to do so is not adverse in any material respect to the Holders.
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The Company will, and will cause each of its Subsidiaries to, maintain or cause to be maintained, with financially sound and reputable insurers of national standing, such public liability insurance, third party property damage insurance, business interruption insurance, casualty insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of the Company Parties and their Subsidiaries and insurance against other risks, in each case as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses, in each case, in such amounts (giving effect to self-insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as are customary for such Persons. Each such policy of insurance shall (1) name the Notes Secured Parties as additional insureds thereunder as their interests may appear and (2) in the case of each property insurance policy, contain a customary lender loss payable and/or additional insured clause or endorsement, reasonably satisfactory in form and substance to the Collateral Agent.
Section 5.14 Offer to Repurchase Upon Change of Control. Subject to the Intercreditor Agreements, (a) upon the occurrence of a Change of Control, unless the Company has previously or concurrently sent a redemption notice with respect to all of the outstanding Notes as provided by Section 3.07, each Holder shall have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes pursuant to the offer described below at a purchase price in cash equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest to the date of purchase (the “Change of Control Payment”). Within 30 days following any Change of Control, unless the Company has previously or concurrently sent a redemption notice with respect to all of the outstanding Notes as provided by Section 3.07, the Company will send a notice to each Holder with a copy to the Trustee (the “Change of Control Offer”) stating:
(i) that a Change of Control has occurred and that, subject to the Intercreditor Agreements, such holder has the right to require the Company to purchase such holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase, plus accrued and unpaid interest to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date);
(ii) the circumstances and relevant facts regarding such Change of Control;
(iii) the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is sent);
(iv) that any Notes not tendered or accepted for payment shall continue to accrue interest;
(v) that, unless the Company defaults in making the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date;
(vi) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer shall be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes completed, to the Paying Agent or Depositary, as applicable, at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date, subject to the Applicable Procedures;
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(vii) that Holders shall be entitled to withdraw their election if the Paying Agent or Depositary, as applicable, receives, not later than the close of business on the third Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing its election to have the Notes purchased, subject to the Applicable Procedures;
(viii) that Holders whose Notes are being purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer), which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof; and
(ix) the instructions, as determined by the Company, consistent with this Section 5.14, that a Holder must follow in order to have its Notes purchased.
(b) On a date that is at least 30 but no more than 60 days from the date on which the Company sends notice of the Change of Control (the “Change of Control Payment Date”), the Company will, to the extent lawful and subject to the Intercreditor Agreements, (i) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered, and (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent shall promptly send to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will, upon receipt of an Authentication Order, promptly authenticate and send (or cause to be transferred by book-entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. Notes (or portions thereof) purchased pursuant to a Change of Control Offer will be cancelled and may not be reissued. A Change of Control Offer may be made at the same time as consents are solicited with respect to an amendment, supplement or waiver of the provisions of this Indenture, the Notes and/or the Guarantees; provided that such Change of Control Offer shall not include the delivery of such consents as a condition precedent.
(c) The Company will not be required to make a Change of Control Offer upon a Change of Control if a third-party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
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A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control occurring, if a definitive agreement is in place for the Change of Control at the time of making the Change of Control Offer.
The Company will comply, to the extent applicable, with the requirements of Section 14(c) of, and Rule 14e-1 under, the Exchange Act and any other securities laws and regulations thereunder in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by virtue of its compliance with such securities laws or regulations.
Section 5.15 [Reserved].
Section 5.16 [Reserved].
Section 5.17 Additional Subsidiary Guarantees. If (i) the Company or any of its Subsidiaries shall acquire or create another Domestic Subsidiary after the Issue Date (other than a Receivables Entity and other than Loan SPV) or (ii) any Foreign Subsidiary of the Company Guarantees (or otherwise becomes liable for) Indebtedness of the Company or a Guarantor, then the Company will cause such Subsidiary to become a Guarantor and:
(1) execute a supplemental indenture substantially in the form of Exhibit E attached hereto, in accordance with the terms of this Indenture, pursuant to which such Subsidiary shall unconditionally guarantee, on a senior secured basis, all of the Company’s Obligations under the Indenture Documents on the terms set forth in this Indenture;
(2) execute and deliver to the Collateral Agent such amendments or supplements to the Collateral Documents necessary in order to grant to the Collateral Agent, for the benefit of the Notes Secured Parties, a perfected security interest in the Equity Interests of such Subsidiary, subject to Permitted Liens and the Intercreditor Agreements, which are owned by the Company or a Guarantor and are required to be pledged pursuant to the Collateral Documents;
(3) take such actions as are necessary to grant to the Collateral Agent for the benefit of the Notes Secured Parties a perfected security interest in the assets of such Subsidiary, other than Excluded Assets and subject to Permitted Liens and the Intercreditor Agreements, including the filing of Uniform Commercial Code financing statements, in each case as may be required by the Collateral Documents;
(4) take such further action and execute and deliver such other documents specified in the Indenture Documents or as otherwise may be reasonably requested by the Trustee or Collateral Agent to give effect to the foregoing; and
(5) deliver to the Trustee and the Collateral Agent an Opinion of Counsel that (i) such supplemental indenture and any other documents required to be delivered have been duly authorized, executed and delivered by such Subsidiary and constitute legal, valid, binding and enforceable obligations of such Subsidiary and (ii) the Collateral Documents to which such Subsidiary is a party create a valid perfected Lien on the Collateral covered thereby.
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Section 5.18 Business Activities. The Company will not, and will not permit any of its Subsidiaries to, engage in any business other than Similar Businesses.
Section 5.19 [Reserved].
Section 5.20 [Reserved].
Section 5.21 Mortgages. With respect to any fee interest in any real property that (a) is acquired by the Company or a Guarantor after the Issue Date that does not constitute an Excluded Asset set forth in clause (3) of the definition thereof or (b) whether owned by the Company or a Guarantor as of the Issue Date or subsequently acquired by the Company or a Guarantor, ceases to constitute an Excluded Asset as set forth in clause (3) of the definition thereof (such real property referred to individually and collectively as the “Premises”), within 120 days of such acquisition or cessation (as applicable), the Company will or will cause the applicable Guarantor, as the case may be, to:
(1) deliver to the Collateral Agent, as mortgagee, for the benefit of the Notes Secured Parties, fully executed Mortgages, duly executed by the Company or the applicable Guarantor, as the case may be, together with evidence of the completion (or satisfactory arrangements for the completion), or all recordings and filings of such Mortgage as may be necessary to create a valid, perfected Lien, subject to Permitted Liens and the Intercreditor Agreements, against the Premises purported to be covered thereby;
(2) deliver to the Collateral Agent, a mortgagee’s title insurance policy in favor of the Collateral Agent in an amount equal to 100% of the Fair Market Value of the Premises purported to be covered by the related Mortgage, insuring that the interests created by the Mortgage constitute valid Liens thereon free and clear of all Liens, defects and encumbrances other than Permitted Liens and any other exceptions disclosed in such policy, and such policy shall also include, to the extent available and issued at ordinary rates, customary endorsements and shall be accompanied by evidence of the payment in full (or satisfactory arrangements for the payment) of all premiums thereon;
(3) deliver to the Collateral Agent, the most recent survey of such Premises, together with either (i) an updated survey certification in favor of the Collateral Agent from the applicable surveyor stating that, based on a visual inspection of the property and the knowledge of the surveyor, there has been no change in the facts depicted in the survey or (ii) an affidavit and/or indemnity from the Company or the applicable Guarantor, as the case may be, stating that to its knowledge there has been no change in the facts depicted in the survey, other than, in each case, changes that do not materially adversely affect the use by the Company or Guarantor, as applicable, of such Premises for the Company or such Guarantor’s business as so conducted, or intended to be conducted, at such Premises and in each case, in form sufficient for the title insurer issuing the title policy to remove the standard survey exception from such policy and issue a survey endorsement to such policy; and
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(4) deliver an Opinion of Counsel to the Collateral Agent that such Mortgage has been duly authorized, executed and delivered by the Company or such Guarantor, constitutes a legal, valid, binding and enforceable obligation of the Company or such Guarantor and creates a valid perfected Lien in the Premises purported to be covered thereby.
Section 5.22 Further Assurances. The Company will, and will cause each Guarantor to, at their sole cost and expense, (i) execute and deliver all such agreements and instruments as may be necessary and as the Collateral Agent shall reasonably request to more fully or accurately describe the property intended to be Collateral or the obligations intended to be secured by the Collateral Documents and (ii) file any such notice filings or other agreements or instruments as may be reasonably necessary under applicable law to perfect (and maintain the perfection and priority of) the Liens created by the Collateral Documents, subject to Permitted Liens, at such times and at such places as the Collateral Agent may reasonably request, in each case subject to the terms of the Collateral Documents.
Section 5.23 Loan SPV. The Company shall not permit Loan SPV (A) to Incur any Indebtedness other than Backstop Notes Incurred on the Issue Date in aggregate initial principal amount not to exceed $[***], plus accrued interest and any interest that is paid in kind and capitalized following the Issue Date in accordance with the terms of the Backstop Notes, (B) to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind on any asset now owned or hereafter acquired by it, other than Liens to secure the obligations under the Backstop Notes, (C) to Dispose of any assets, business or property, other than the making of interest, premium and principal payments to the holders of the Backstop Notes in connection with the satisfaction of any of the Loan SPV’s obligations under the Backstop Notes in accordance with their terms, (D) to make or hold any Investment other than the loans issued pursuant to the Credit Agreement and cash or Cash Equivalents, (E) to make any Restricted Payment, other than in the form of cash dividends to its parent to the extent consistent with its obligations in respect of the Backstop Notes, (F) to, directly or indirectly, merge into, amalgamate with or consolidate with any other Person, or permit any other Person to merge into, amalgamate with or consolidate with it, other than a merger or other consolidation with and into the Company or any Subsidiary in connection with the satisfaction in full of the Backstop Notes, (G) to acquire any assets, business or property other than the Loans on the Issue Date and any cash or Cash Equivalents, (H) breach or violate any of its organizational documents or the Backstop Notes, or (I) engage in any business or activity other than (1) the making on the Issue Date, and ownership of, Loans in an aggregate initial principal amount not to exceed $[***], (2) maintaining its corporate existence, (3) participating in tax, accounting and other administrative activities, (4) execution and delivery of the Backstop Notes and any other security and other documentation incidental there to which it is a party and the performance of its obligations thereunder, (5) receiving and holding cash and Cash Equivalents in deposit accounts and securities accounts, and (6) activities incidental to the businesses or activities described in clauses (1) through (5) of this Section 5.23. Notwithstanding anything to the contrary set forth in this Agreement or otherwise, neither the Company nor any of its Subsidiaries shall (i) repay, prepay, purchase, repurchase, redeem, defease or otherwise acquire or retire for value any Backstop Notes (except (A) payments by Loan SPV and (B) subject to the such Guarantee being contractually subordinated in right of payment to the payment in full of the Obligations of the Company, payments under the guarantee of the Backstop Notes by the Company) or (ii) make any Investment in, or Dispose of any assets or properties to Loan SPV (other than (i) holding Equity Interests of Loan SPV issued to the Borrower or its applicable Subsidiary prior to the Issue Date and (ii) making payments on the loans under the Credit Agreement held by Loan SPV in accordance with the terms of the Credit Agreement and the other Facility Documents (as defined in the Credit Agreement)).
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Section 5.24 Minimum Liquidity. The Company shall, at all times, maintain Liquidity as of the last day of each calendar month, beginning May 31, 2023, of (a) prior to September 30, 2024, equal to or greater than $[***] and (b) on and after September 30, 2024, equal to or greater than $[***].
Section 5.25 Minimum Adjusted Pre-Tax Income. The Company shall, at all times, maintain the Adjusted Pre-Tax Income of itself and its Subsidiaries for each four-Fiscal-Quarter period, beginning with such period ending on March 31, 2024, of at least the Minimum Adjusted Pre-Tax Income.
Section 5.26 Operating Covenants. The Company shall:
(a) Deliver a Business Plan reasonably satisfactory to the Required Ad Hoc Group Lenders no later than August 31, 2023; provided that if no such Business Plan reasonably satisfactory to the Required Ad Hoc Group Lenders is delivered by such date, the Company shall retain by no later than September 30, 2023, a nationally recognized consulting firm, whose selection and compensation shall be subject to the reasonable consent of the Required Ad Hoc Group Lenders to advise on, inter alia, selling, general and administrative expenses and operating expenses of the Company and its Subsidiaries; provided further that, following such retention, the Company and its Subsidiaries shall promptly consider such consulting firm’s recommendations in good faith and promptly implement such recommendations to the extent appropriate in the business judgment of management of the Company and its Subsidiaries.
(b) [Reserved].
(c) As of the last day of each Fiscal Quarter, beginning on March 31, 2024, maintain a ratio of (i) Operating Expenses for the four-Fiscal-Quarter period ending on the last day of such Fiscal Quarter to (ii) to the average amount of gross loans receivable for the five-Fiscal-Quarter period ending on the last day of such Fiscal Quarter (as shown on the balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP), which shall be calculated as the average of the gross loans receivable balance as of the last day of each Fiscal Quarter in the five-Fiscal-Quarter period ending on the last day of such Fiscal Quarter, not greater than the Maximum Operating Expense to Asset Ratio for such Fiscal Quarter.
(d) As of the last day of each Fiscal Quarter beginning on December 31, 2023, cause:
(i) the aggregate outstanding principal amount of Indebtedness with respect to Qualified Receivables Facilities related to the United States direct lending business line of the Company and its Subsidiaries not to exceed [***]% of the amount of the aggregate commitments under such Qualified Receivables Facilities; and
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(ii) the aggregate outstanding principal amount of Indebtedness with respect to all Qualified Receivables Facilities related to the Canada direct lending business line of the Company and its Subsidiaries not to exceed [***]% of the amount of the aggregate commitments under such Qualified Receivables Facilities.
(e) In the event that any covenant set forth in clauses (a) through (d) above fails to be satisfied, the Company shall promptly (and, in no event, later than ninety (90) days following the date such failure occurs) appoint to the Board of Directors of the Company a new independent director (reasonably satisfactory to the Required Ad Hoc Group Lenders) who possesses expertise in the business of the Company and its Subsidiaries. For the avoidance of doubt, appointment of such independent director shall not cure or waive any such breach (or any resulting Default or Event of Default).
(f) For purposes of determining compliance with Section 5.26(d), the net proceeds of any Permitted Equity Issuance by the Company after the last day of any Fiscal Quarter and on or prior to the day that is ten (10) days thereafter shall, at the written request of the Company, solely for purposes of calculating compliance with Section 5.26(d) be subtracted from the outstanding principal amount of Indebtedness with respect to a single Qualified Receivables Facility at the end of such Fiscal Quarter; provided, that:
(i) the net proceeds of such Permitted Equity Issuance shall be in an amount at least equal to the minimum amount necessary for the Company to be in compliance with Section 5.26(d) with respect to such Qualified Receivables Facility; and
(ii) the net proceeds of a Permitted Equity Issuance may not be applied as set forth in this Section 5.26(f) (A) more than two (2) times per Fiscal Year, (B) more than three (3) times during the term of this Indenture and (C) with respect to more than two (2) consecutive Fiscal Quarters.
The parties hereby acknowledge, notwithstanding anything to the contrary set forth herein or otherwise, that this Section 5.26(f) (and any Permitted Equity Issuance given effect hereunder) may not be relied on for purposes of calculating any other financial ratios and shall not result in any adjustment other than for purposes of compliance with Section 5.26(d) (and not, for avoidance of doubt, for purposes of determining any basket sizes, the permissibility of any transaction or for any other purposes of this Indenture).
Section 5.27 Post-Issuance Obligations. The Company shall, and shall cause its Subsidiaries to, complete all undertakings set forth on Schedule I attached hereto in the time periods specified therein.
ARTICLE 6
Successors
Section 6.01 Merger, Consolidation or Sale of Assets.
(a) The Company. The Company may not, in any transaction or series of related transactions, consolidate or amalgamate with or merge with or into (whether or not the Company survives), or sell, assign, convey, transfer, lease or otherwise dispose of (or cause or permit any Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of its property and assets whether as an entirety or substantially as an entirety, to any Person, unless:
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(i) either:
(A) if the transaction or series of transactions is a consolidation of the Company with or a merger of the Company with or into any other Person, the Company will be the surviving Person of such merger or consolidation; or
(B) the Person formed by any consolidation or merger with or into the Company or to which all or substantially all of the properties and assets of the Company and its Subsidiaries, taken as a whole, are sold, assigned, conveyed, transferred, leased or otherwise disposed of shall be a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia, and such Person shall expressly assume by (i) a supplemental indenture executed and delivered to the Trustee, all of the obligations of the Company under the Notes and this Indenture, and this Indenture, as so supplemented, shall remain in full force and effect and (ii) an amendment, supplement or other instrument, executed and delivered to the Trustee, all obligations of the Company under the Collateral Documents, and in connection therewith will cause such instruments to be filed and recorded in such jurisdictions and take such other actions as may be required by applicable law to perfect or continue the perfection of the Lien created under the Collateral Documents on the Collateral owned by or transferred to the surviving entity; and
(ii) immediately before and after giving effect to such transaction or series of transactions on a pro forma basis (including any Indebtedness Incurred or anticipated to be Incurred in connection with or in respect of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing.
The foregoing requirements shall not apply to any transaction or series of transactions involving the sale, assignment, conveyance, transfer, lease or other disposition of any properties or assets by any Subsidiary of the Company to the Company or any Guarantor, the consolidation or merger of any Subsidiary of the Company with or into any Guarantor or the Company or, for the avoidance of doubt, the consolidation or merger of any Subsidiary of the Company that is not a Guarantor with or into any other Subsidiary of the Company that is not a Guarantor.
In connection with any consolidation, merger, sale, assignment, conveyance, transfer, lease or other disposition contemplated by the foregoing provisions, the Company will deliver, or cause to be delivered, to the Trustee an Officer’s Certificate stating that such consolidation, merger, sale, assignment, conveyance, transfer, lease or other disposition and the supplemental indenture in respect thereof comply with the requirements of this Indenture and an Opinion of Counsel. Each such Officer’s Certificate shall set forth the manner of determination of the Company’s compliance with clause (iii) of this subsection (a).
(b) The Guarantors. Subject to Section 11.03, each Subsidiary of the Company that is a Guarantor will not, in any transaction or series of related transactions merge or consolidate or amalgamate with or into (whether or not such Guarantor survives), or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to, any Person, unless either:
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(i) either:
(A) if the transaction or series of transactions is a consolidation of such Guarantor with or a merger of such Guarantor with or into any other Person, such Guarantor shall be the surviving Person of such consolidation or merger; or
(B) the Person formed by any consolidation or merger with or into such Guarantor, or to which all or substantially all of the properties and assets of such Guarantor and its Subsidiaries, taken as a whole, as the case may be, are sold, assigned, conveyed, transferred, leased or otherwise disposed of shall be a corporation, partnership, limited liability company or trust organized and existing under the laws of the United States, any state thereof or the District of Columbia, and shall expressly assume by (i) a supplemental indenture executed and delivered to the Trustee, all of the obligations of such Guarantor under its Notes Guarantee and this Indenture, and this Indenture, as so supplemented, shall remain in full force and effect and (ii) an amendment, supplement or other instrument, executed and delivered to the Trustee, all obligations of such Guarantor under the Collateral Documents, and in connection therewith will cause such instruments to be filed and recorded in such jurisdictions and take such other actions as may be required by applicable law to perfect or continue the perfection of the Lien created under the Collateral Documents on the Collateral owned by or transferred to the surviving entity; or
(ii) the transaction is made in compliance with Section 5.10.
The foregoing requirements shall not apply to any transaction or series of transactions involving the sale, assignment, conveyance, transfer, lease or other disposition of any properties or assets by any Subsidiary of the Company to the Company or any Guarantor, or the consolidation or merger of any Subsidiary of the Company with or into the Company or any Guarantor, or, for the avoidance of doubt, the consolidation or merger of any Subsidiary of the Company that is not a Guarantor with or into any other Subsidiary of the Company that is not a Guarantor.
In connection with any consolidation, merger, sale, assignment, conveyance, transfer, lease or other disposition contemplated by Section 6.01(b)(i), such Guarantor shall deliver, or cause to be delivered, to the Trustee an Officer’s Certificate stating that such consolidation, merger, sale, assignment, conveyance, transfer, lease or other disposition and the supplemental indenture in respect thereof comply with the requirements of this Indenture and an Opinion of Counsel.
Section 6.02 Successor Entity Substituted. Upon any consolidation or merger of the Company or any Guarantor, or any sale, assignment, conveyance, transfer or other disposition of all or substantially all of the assets of the Company or such Guarantor in accordance with the foregoing, in which the Company or such Guarantor is not the continuing obligor under the Notes or its Notes Guarantee, the surviving entity formed by such consolidation or into which the Company or such Guarantor is merged or to which the sale, assignment, conveyance, transfer or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company or such Guarantor under the Indenture Documents with the same effect as if such surviving entity had been named herein and therein as the Company or such Guarantor and, except in the case of a lease, the Company or such Guarantor, as the case may be, shall be released from the obligation to pay the principal of, premium, if any, and interest on the Notes or in respect of its Notes Guarantee, as the case may be, and all of the Company’s or such Guarantor’s other obligations and covenants under the Indenture Documents, if applicable.
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ARTICLE 7
Defaults and Remedies
Section 7.01 Events of Default. Each of the following shall be an “Event of Default”:
(a) default for five (5) Business Days in the payment when due of interest on the Notes;
(b) default in payment when due of the principal, or premium, if any, of any Note when due at maturity, upon optional redemption, upon required purchase, upon acceleration or otherwise;
(c) (i) failure by the Company or any of its Subsidiaries to comply with its obligations under Sections 5.07, 5.09, 5.10, 5.11, 5.12, 5.13, 5.14, 5.23, 5.24, 5.25, 5.26(c), 5.26(e) or Article 6 or (ii) failure by the Company or any of its Subsidiaries to comply with its obligations under Sections 5.08, 5.17, 5.26(a), 5.26(d) or the Credit Agreement Side Letter (as defined in the Credit Agreement) and such failure continues for 10 days;
(d) failure to perform any other covenant or agreement of the Company or any of its Subsidiaries under the Indenture Documents for 30 days after written notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding voting as a single class (with a copy to the Trustee);
(e) (A) default under any Indebtedness (other than the Notes or any Qualified Receivables Facility) of the Company or any of its Subsidiaries (or the payment of which is Guaranteed by the Company or any of its Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default (1) is caused by a failure to pay principal when due (whether by final stated maturity, required prepayment, acceleration, demand or otherwise) after giving effect to all applicable grace periods provided in such Indebtedness (a “Payment Default”), or (2) results in the acceleration of such Indebtedness prior to its final stated maturity or in the requirement for the Company to offer to repurchase, prepay, defease or redeem such Indebtedness prior to its final stated maturity, provided that this clause (A)(2) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness and such Indebtedness is repaid when required under the documents providing for such Indebtedness and, further provided that in each case under clauses (A)(1) and (A)(2), either (I) such Indebtedness consists of the Credit Agreement or the Existing Notes Indenture or (II) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or there has been such a default, aggregates in excess of $10.0 million (or its foreign currency equivalent); or (B) the occurrence of an “Event of Default” or other similar event or circumstance under the Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility or any other Qualified Receivables Facility, in each case, after giving effect to any grace period therein, that either (A) results in the acceleration of all or any portion of such Indebtedness prior to its final stated maturity or (B) has not been remedied (by amendment, cure, waiver or otherwise) thereunder within thirty (30) days after the related lenders thereunder received notice of the occurrence of such “Event of Default” (or other similar event or circumstance);
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(f) failure by the Company or any of its Subsidiaries to pay final judgments which are non-appealable aggregating in excess of $10.0 million (or its foreign currency equivalent) (not covered by independent third-party insurance as to which liability has not been denied by such insurance carrier), which judgments are not paid, discharged or stayed for a period of 30 days following such judgment becoming final, and in the event such judgment is covered by insurance, any enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed;
(g) (i) any security interest created by any Collateral Document ceases to be in full force and effect (except as permitted by the terms of this Indenture or the Collateral Documents); provided that, such cessation, individually or in the aggregate, results in Collateral having a Fair Market Value in excess of $10,000,000 not being subject to a valid, perfected security interest or (ii) (A) any Company Party shall deny its obligations under any Indenture Document (to which it is a party) or (B) any material provision of any Indenture Document, after delivery thereof in accordance with the terms thereof, shall for any reason cease to be valid and binding upon, or enforceable against, any Company Party;
(h) except as permitted by this Indenture, any Notes Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Notes Guarantee;
(i) the Company, or any Significant Subsidiary of the Company or any group of Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company, pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case or proceeding,
(ii) consents to the entry of an order for relief against it in an involuntary case or proceeding,
(iii) consents to the appointment of a Custodian of it or for all or substantially all of its property, or
(iv) makes a general assignment for the benefit of its creditors;
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(j) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Company, or any Significant Subsidiary of the Company or any group of Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company, in an involuntary case;
(ii) appoints a Custodian of the Company, or any Significant Subsidiary of the Company or any group of Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company, or for all or substantially all of the property of the Company, or any Significant Subsidiary of the Company or any group of Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company; or
(iii) orders the liquidation of the Company, or any Significant Subsidiary of the Company or any group of Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company;
and the order or decree remains unstayed and in effect for 60 consecutive days.
The term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
In the event of any Event of Default specified under subsection (e) above, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders of Notes, if within 20 days after such Event of Default arose the Company delivers an Officer’s Certificate to the Trustee stating that:
(a) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged; or
(b) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default;
(c) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction; and
(d) all existing Events of Default, except nonpayment of principal, premium or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.
Section 7.02 Acceleration. If any Event of Default (other than an Event of Default specified in subsection (i) or (j) of Section 7.01) occurs and is continuing and has not been waived by the Holders, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in subsection (i) or (j) of Section 7.01 occurs, all outstanding Notes shall be due and payable immediately without further action or notice. The Holders of at least a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, premium, if any, or interest that has become due solely because of the acceleration) have been cured or waived and all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements, and advances of the Trustee and its agents and counsel have been paid or deposited with the Trustee or provision therefor satisfactory to the Trustee has been made.
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Section 7.03 Other Remedies. If an Event of Default occurs and is continuing, if directed pursuant to Section 7.05, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Indenture Documents.
If directed pursuant to Section 7.05, the Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
Section 7.04 Waiver of Past Defaults. The Holders of at least a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive (including in connection with a purchase of, or tender offer or exchange offer for, Notes) any existing Default or Event of Default and its consequences under this Indenture (including any acceleration of the Notes), except a continuing Default or Event of Default in the payment of principal of, premium, if any, or interest on the Notes (including in connection with an offer to purchase); provided, however, that the Holders of at least a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, premium, if any, or interest that has become due solely because of the acceleration) have been cured or waived. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
Section 7.05 Control by Majority. Holders of at least a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of other Holders (it being understood that the Trustee will have no duty to ascertain whether such actions or forbearances are unduly prejudicial to such other Holders) or that would involve the Trustee in personal liability. The Trustee will be entitled to security and indemnification satisfactory to it prior to taking any action (or refraining from acting). The Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.
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Section 7.06 Limitation on Suits. A Holder may pursue a remedy with respect to this Indenture or the Notes only if:
(a) the Holder gives to the Trustee written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if requested, provide to the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 30 days after receipt of the request and the offer and, if requested, the provision of security or indemnity; and
(e) during such 30-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not any uses are unduly prejudicial to such Holders) or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. The Trustee will send to all Holders any notice it receives from Holders under this Section 7.06.
Section 7.07 Rights of Holders To Receive Payment. Notwithstanding any other provision of this Indenture, the contractual right of any Holder to receive payment of principal, premium, if any, or interest on any Note, on or after the respective due dates expressed in any such Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
Section 7.08 Collection Suit By Trustee. If an Event of Default specified in Section 7.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, if any, or interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
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Section 7.09 Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company or any of the Guarantors (or any other obligor upon the Notes) or their respective creditors or property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee will consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee hereunder. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee hereunder out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.
Section 7.10 Priorities. Subject to the terms of the Intercreditor Agreements, any money collected by the Trustee hereunder or in connection herewith or by the Collateral Agent pursuant to the Collateral Documents, or any money or other property distributable in respect of the Company’s or the Guarantors’ obligations under the Indenture Documents after an Event of Default, shall be applied in the following order:
First: to the Trustee, the Collateral Agent and their respective agents, reasonably retained professional advisors, and attorneys for amounts due or reasonably anticipated to become due under Section 8.07, including payment of all reasonable compensation, expense and liabilities incurred, and all advances made, by the Trustee and the Collateral Agent and the costs and expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for interest;
Third: to Holders for amounts due and unpaid on the Notes for principal and premium, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and premium, respectively; and
Fourth: to the Company or to such party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 7.10.
Section 7.11 Undertaking For Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 7.07 or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.
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Section 7.12 Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy are, to the extent permitted by law, cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 7.13 Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
ARTICLE 8
Trustee
Section 8.01 Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
(b) Prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Defaults that may have occurred:
(i) the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee will examine the certificates and opinions to determine whether or not they are in a form that conforms to the requirements of this Indenture (but need not confirm or investigate, and may rely exclusively upon, the accuracy of mathematical calculations or other facts, statements, opinions or conclusions stated therein).
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(c) The Trustee may not be relieved from liabilities for its own gross negligent action, its own gross negligent failure to act, or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of subsection (b) of this Section 8.01;
(ii) the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee will not be liable, in any event, with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 7.05, or a direction from the Holders of a majority in principal amount of the outstanding Notes concerning the exercise of any right, trust or power conferred upon the Trustee; and
(iv) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to subsections (a), (b), and (c) of this Section 8.01.
(e) The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request or direction of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) The Trustee is hereby authorized and directed to execute and deliver each Indenture Document or Collateral Document to which it is a party.
Section 8.02 Rights of Trustee. (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. The Trustee may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of, or information obtained from, any accountant, appraiser or other expert or adviser, whether retained or employed by the Company or by the Trustee, in relation to any matter arising in the administration of the trusts hereof.
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(c) The Trustee may employ or retain such counsel, accountants, appraisers or other experts or advisers as it may reasonably require for the purpose of determining and discharging its rights and duties hereunder and shall not be responsible for any misconduct on the part of any of them. The Trustee may act through its attorneys and agents and shall not be responsible for the acts or omissions of any agent or attorney appointed with due care, and the Trustee will not be responsible for the supervision of officers and employees of such agents or attorneys or the application of any money by any Agent other than the Trustee.
(d) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company will be sufficient if signed by an Officer of the Company.
(f) The rights, privileges, protections, immunities and benefits given to the Trustee, including, its right to be compensated, reimbursed, provided security and indemnified, and its right to resign, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder or in any Indenture Document or Collateral Document, including but not limited to its capacities as Collateral Agent, Note Custodian, Paying Agent and Registrar, and to each agent, custodian and other Person employed to act hereunder or in any Indenture Document or Collateral Document.
(g) In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including strikes, pandemics, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee will use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
(h) The Trustee will not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee with responsibility over matters concerning the Notes and this Indenture has actual knowledge thereof or unless written notice of any event which is in fact such a Default or Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture and is provided by the Company or any Holder of the Notes and is identified as a “Notice of Default.”
(i) The Trustee need not investigate any fact or matter stated in any document delivered to it, but the Trustee, in its discretion or if directed to do so, may make such further inquiry or investigation into such facts or matters, and, if the Trustee will determine in good faith or if directed to do so to make such further inquiry or investigation, it shall be entitled upon reasonable notice during normal business hours to examine the books, records and premises of the Company and the Guarantors, personally or by agent or attorney at the sole cost of the Company and the Guarantors and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. The Trustee shall have no duty to perform any calculation hereunder or under the Notes, nor have any liability or responsibility for any calculation or any information used in any such calculations.
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(j) In no event shall the Trustee be responsible or liable for special, indirect, exemplary, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(k) The Trustee may, from time to time, request that the Company and the Guarantors deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to the Indenture Documents, which Officer’s Certificate may be signed by any Person authorized to sign an Officer’s Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.
(l) No permissive or discretionary power or authority available to the Trustee will be construed to be a duty of the Trustee.
(m) The Company will provide prompt written notice to the Trustee of any change to its fiscal year.
(n) Before the Trustee acts or refrains from acting with respect to any matter requiring the consent of the First Priority Agent, the Required Ad Hoc Group Lenders or the Required Term Lenders, as applicable, it may require an Officer’s Certificate confirming that the Company has received the consent of the First Priority Agent, the Required Ad Hoc Group Lenders or the Required Term Lenders, as applicable. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such certificate.
Section 8.03 Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee and nothing in this Indenture shall deprive the Trustee of any rights as a holder or pledge of Notes. However, in the event that the Trustee acquires any conflicting interest as defined by the TIA it must eliminate such conflict within 90 days or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 8.10 and 8.11.
Section 8.04 Trustee’s Disclaimer. The Trustee will not be responsible for and makes no representation as to the validity or adequacy of any of the Indenture Documents or the Collateral. The Trustee will not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.
Section 8.05 Notice of Defaults. If a Default or Event of Default occurs and is continuing and if it is actually known to a Responsible Officer of the Trustee, the Trustee will send to Holders, with a copy to the Company, a notice of the Default or Event of Default within 90 days after it occurs or if known to the Trustee later than 90 days after it occurs, as soon as practicable, unless such Default or Event of Default shall have been cured or waived before the giving of such notice. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as the Trustee in good faith determines that withholding the notice is in the interests of the Holders.
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Section 8.06 [Reserved].
Section 8.07 Compensation and Indemnity. The Company will pay to the Trustee from time to time compensation for its acceptance of this Indenture and services hereunder as the Trustee and the Company will have agreed in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company will reimburse the Trustee promptly upon request for all reasonable and documented disbursements, advances and out-of-pocket expenses incurred or made by it in connection with the Trustee’s duties under this Indenture and the Indenture Documents, including the reasonable compensation, disbursements and expenses of the Trustee’s agents, reasonably retained professional advisors, and counsel.
The Company will indemnify and hold harmless the Trustee against any and all claims, demands, causes of action, losses, liabilities, damages, fines, penalties, costs, fees, charges or expenses including taxes (other than taxes based upon, measured by or determined by income of the Trustee) incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 8.07) and defending itself against any claim (whether asserted by the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its gross negligence, bad faith or willful misconduct as determined by a court of competent jurisdiction in a final non-appealable order. The Trustee will notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company will not relieve the Company of its obligations hereunder. The Company will defend the claim and the Trustee will cooperate in the defense. In the event the Trustee is advised by counsel that a conflict of interest exists, the Trustee may have its own separate counsel, which, so long as no Default or Event of Default has occurred, shall be reasonably satisfactory to the Company, and the Company will pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The obligations of the Company under this Section 8.07 shall survive the satisfaction and discharge of the Notes, the termination for any reason of this Indenture and the resignation or removal of the Trustee.
To secure the Company’s payment obligations in this Section, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal, premium, if any, and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 7.01(i) or (j) occurs, the expenses and the compensation for the services (including the reasonable fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.
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At all times, there shall be only one Trustee hereunder.
The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its rights to be secured and indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder and under the Indenture Documents and the Collateral Agent, each agent, custodian or other Person employed to act hereunder or in connection with the other Indenture Documents.
Section 8.08 Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company in writing no later than 30 days prior to the date of the proposed resignation. The Holders of at least a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 8.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of at least a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 8.10, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
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A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture other than those designated as continuing notwithstanding the Trustee’s resignation or removal and those that otherwise are personal to the Trustee in its individual capacity. The successor Trustee will send a notice of its succession to Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided that all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 8.07. Notwithstanding replacement of the Trustee pursuant to this Section 8.08, the Company’s obligations and the Trustee’s rights and remedies under Section 8.07 shall continue for the benefit of the retiring Trustee.
Section 8.09 Successor Trustee by Merger, Etc. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another entity, the successor entity without any further act or filings of any papers shall be the successor Trustee; provided such successor entity shall be otherwise qualified and eligible under this Article 8.
Section 8.10 Eligibility, Disqualification. There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has trust assets under administration of not less than $100,000,000.
This Indenture shall always have a Trustee who satisfies the requirements of TIA §§ 310(a)(1),(2) and (5). The Trustee is subject to TIA § 310(b).
No provision of this Indenture shall be deemed to impose any duty or obligation on the Trustee to perform any act or acts, receive or obtain any interest in property or exercise any interest in property, or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Trustee will be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, to receive or obtain any such interest in property or to exercise any such right, power, duty or obligation; and no permissive or discretionary power or authority available to the Trustee will be construed to be a duty.
Section 8.11 Preferential Collection of Claims Against Company. The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.
ARTICLE 9
Legal Defeasance and Covenant Defeasance
Section 9.01 Option to Effect Legal Defeasance or Covenant Defeasance. The Company may, at its option, elect to have either Section 9.02 or 9.03 be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 9.
Section 9.02 Legal Defeasance and Discharge. Upon the Company’s exercise under Section 9.01 of the option applicable to this Section 9.02, the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 9.04, be deemed to have been discharged from their respective obligations under the Indenture Documents with respect to all outstanding Notes on and after the date all the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 9.05 and the other Sections of this Indenture referred to in subsections (a) and (b) of this Section 9.02 below, and the Company and the Guarantors to have satisfied all their other obligations under such Notes and the Indenture Documents (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:
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(a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 9.04, and as more fully set forth in such Section, payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due;
(b) the Company’s obligations with respect to such Notes under Article 2;
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s obligations in connection therewith; and
(d) this Article 9.
Subject to compliance with this Article 9, the Company may exercise its option under this Section 9.02 notwithstanding the prior exercise of its option under Section 9.03.
Section 9.03 Covenant Defeasance. Upon the Company’s exercise under Section 9.01 of the option applicable to this Section 9.03, the Company and the Company’s Subsidiaries shall, subject to the satisfaction of the conditions set forth in Section 9.04, be released from the obligations under the covenants contained in Sections 5.03, 5.04, 5.07, 5.08, 5.09, 5.10, 5.11, 5.12, 5.13 (except as such Section relates to the Company preserving its corporate existence), 5.14, 5.15, 5.17, 5.18, 5.21, 5.22, 5.23, 5.24, 5.25 and 5.26 with respect to the outstanding Notes on and after the date all the conditions set forth in Section 9.04 are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company and its Subsidiaries may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 7.01, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company’s exercise under Section 9.01 of the option applicable to this Section 9.03, subject to the satisfaction of the conditions set forth in Section 9.04, Sections 7.01(c) through Section 7.01(h) shall not constitute Events of Default.
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Section 9.04 Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 9.02 or 9.03 to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in United States dollars, non-callable U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient to pay the principal of, premium, if any, and interest on the outstanding Notes on the Stated Maturity or on the applicable redemption date, as the case may be, which sufficiency, in the case of deposits made fully or partially in non-callable U.S. Obligations, shall be certified in an opinion of a nationally recognized firm of independent certified public accountants, and the Company must specify whether the Notes are being defeased to Stated Maturity or to a particular redemption date;
(b) in the case of an election under Section 9.02, the Company will have delivered to the Trustee an Opinion of Counsel confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the Issue Date, there has been a change in the applicable United States federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 9.03, the Company will have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such Covenant Defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(d) such deposit, defeasance and discharge or deposit and defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;
(e) the Company will have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company with the intent of preferring the holders of the Notes over the other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and
(f) the Company will have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent contained in this Indenture relating to the Legal Defeasance or the Covenant Defeasance have been satisfied.
Section 9.05 Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions. Subject to Section 9.06, all money and non-callable U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 9.05, the “Trustee”) pursuant to Section 9.04 in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.
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The Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable U.S. Government Obligations deposited pursuant to Section 9.04 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 9 to the contrary notwithstanding, the Trustee will deliver or pay to the Company from time to time upon the written request of the Company and within five Business Days following the receipt of such request any money or non-callable U.S. Government Obligations held by it as provided in Section 9.04 which, in the opinion of a nationally recognized firm of independent certified public accountants selected by the Trustee expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 9.04(a)), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 9.06 Repayment to Company. Subject to Section 8.07, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times or The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining shall be repaid to the Company or as required by applicable abandoned property law.
Section 9.07 Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable U.S. Government Obligations in accordance with Section 9.02 or 9.03, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s and the Guarantors’ obligations under the Indenture Documents shall be revived and reinstated as though no deposit had occurred pursuant to Section 9.02 or 9.03 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 9.02 or 9.03, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.
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ARTICLE 10
Amendment, Supplement and Waiver
Section 10.01 Without Consent of Holders. Notwithstanding Section 10.02, the Company, the Trustee and the Collateral Agent may amend, supplement or waive any provision of the Indenture Documents without the consent of any Holder to:
(a) cure any ambiguity, defect, mistake or inconsistency or to make a modification of a formal, minor or technical nature or to correct a manifest error;
(b) provide for uncertificated Notes in addition to or in place of certificated Notes;
(c) comply with Article 6;
(d) provide for the assumption of the Company’s or any Guarantor’s obligations to Holders in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Guarantor’s assets;
(e) add Guarantees with respect to the Notes or to secure the Notes;
(f) add to the covenants of the Company or any Guarantor for the benefit of the holders of the Notes or surrender any right or power conferred upon the Company or any Guarantor;
(g) make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under the Indenture Documents of any such Holder;
(h) if it becomes necessary to qualify this Indenture under the TIA, comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;
(i) (i) enter into additional or supplemental Collateral Documents, (ii) release Collateral or Guarantors in accordance with the terms of this Indenture and the Collateral Documents, (iii) enter into any replacement intercreditor agreements substantially in the form of the Intercreditor Agreements entered into on the Issue Date or any other additional or supplemental intercreditor agreements in connection with the incurrence of any additional Indebtedness permitted under this Indenture, in form and substance approved by the Company as evidenced by the Company’s execution thereof and the Collateral Agent as evidenced by the Collateral Agent’s execution thereof;
(j) evidence and provide for the acceptance and appointment under this Indenture of a successor trustee pursuant to the requirements hereof;
(k) make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including to facilitate the issuance and administration of the Notes or to comply with the rules of any applicable securities depository; provided, however, that (i) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes;
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(l) [reserved]; or
(m) provide for or confirm the issuance of Additional Notes in accordance with the terms of this Indenture.
After an amendment, supplement or waiver under this Section 10.01 becomes effective, the Company will send to Holders a notice briefly describing such amendment, supplement or waiver. However, the failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of the amendment, supplement or waiver.
Upon the request of the Company and upon receipt by the Trustee and the Collateral Agent of the documents described in Section 10.05 hereof, the Trustee and the Collateral Agent shall join with the Company and the Guarantors in the execution of any amended or supplemental indenture or such other Indenture Document authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee and the Collateral Agent shall not be obligated to enter into such amended or supplemental indenture or such other Indenture Document that affects its own rights, duties or immunities under this Indenture or otherwise.
Section 10.02 With Consent of Holders. Except as provided below in this Section 10.02, the Indenture Documents may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing Default or Event of Default or compliance with any provision of the Indenture Documents may be waived with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including consents obtained in connection with purchase of, or tender offer or exchange offer for, the Notes), in each case without notice to any other Holder, but subject to Section 5.20.
It shall not be necessary for the consent of the Holders under this Section 10.02 to approve the particular form of any proposed amendment, supplement or waiver of any Indenture Document, but it shall be sufficient if such consent approves the substance thereof. A consent to any amendment, supplement or waiver of any Indenture Document under this Indenture by any Holder of the Notes given in connection with a tender or exchange of such Holder’s Notes will not be rendered invalid by such tender or exchange.
Notwithstanding anything to the contrary herein, Sections 5.24, 5.25 and 5.26 of this Indenture (including, in each case, any definitions used therein or related definitions) shall be automatically deemed to have been amended, modified, supplemented or waived, as applicable, to match the corresponding provision in the Credit Agreement (as amended, modified, supplemented or waived) without further action of any other Person (including, without limitation, the Holders of the Notes), if (i) the Required Term Lenders consent to an amendment, modification, supplement or waiver of the corresponding provision in the Credit Agreement and (ii) the Company deliver an Officer’s Certificate to the Trustee certifying that such amendments have occurred under the Credit Agreement and attaching a copy of such amendment, modification, supplement or waiver.
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After an amendment, supplement or waiver under this Section 10.02 becomes effective, the Company will send to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to send such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 7.04 and 7.07, the Holders of at least a majority in aggregate principal amount of the Notes then outstanding may waive compliance in a particular instance by the Company and the Company’s Subsidiaries with any provision of any Indenture Document. However, without the consent (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes) of each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;
(b) reduce or forgive the principal of, premium, if any, or extend the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than the provisions of Sections 3.09, 5.10 and 5.14 prior to the time at which an obligation to make such an offer has arisen);
(c) reduce the rate of or extend the time for payment of interest, including default interest, on any Note;
(d) waive a Default in the payment of principal of, premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of holders of Notes to receive payments of principal of, premium, if any, or interest on the Notes;
(g) release any Guarantor from any of its obligations under its Notes Guarantee or this Indenture, except in accordance with the terms of this Indenture; or
(h) make any change to paragraphs (a) to (h) of this Section 10.02;
Additionally, without the consent (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes) of the Holders of at least 90% of the aggregate principal amount of the Notes then outstanding, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder):
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(a) release all or substantially all of the value of the Notes Guarantees or release all or substantially all of the Collateral; or
(b) subordinate the Notes or any Notes Guarantees to any other Indebtedness or subordinate the Liens of the Notes Secured Parties on the Collateral to Liens securing other Indebtedness, other than the subordination of the Liens of the Notes Secured Parties to (i) Liens that are expressly permitted by this Indenture as in effect prior to such amendment to be senior in priority to the Notes Secured Parties’ Liens on the Collateral, (ii) Liens securing Indebtedness for borrowed money (and not, for the avoidance of doubt, Indebtedness incurred in exchange for existing Indebtedness, including the Notes) or (iii) Liens securing Indebtedness which was offered to Holders ratably in accordance with the principal amount of their Notes; provided that this clause (b) will not apply to any transaction during the pendency of any case or proceeding of the Company under any Bankruptcy Law.
Section 10.03 Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to its Note if the Trustee and the Company receive written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver, which record date shall be, at the Company’s election, either (a) at least 30 days prior to the first solicitation of such consent or (b) the date of the most recent list furnished to the Trustee under Section 2.05. If a record date is fixed, then notwithstanding the second to last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.
A consent to any amendment, supplement or waiver under any Indenture Document by any Holder given in connection with a purchase of, or tender offer or exchange offer for, such Holder’s Notes shall not be rendered invalid by such purchase, tender or exchange.
After an amendment, supplement or waiver becomes effective, it shall bind every Holder unless it makes a change described in Section 10.02 which cannot be made without the consent of each Holder affected, in which case, the amendment, supplement or waiver shall bind only each Holder who has consented to it and every subsequent Holder or portion of a Note that evidences the same debt as the consenting Holder’s Note; provided that any such waiver shall not impair or affect the right of any Holder to receive payment of principal of, premium, if any, and interest on a Note, on or after the respective due dates expressed in such Note, or to bring suit for the enforcement of any such payment on or after such respective dates without the consent of such Holder.
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Section 10.04 Notation On or Exchange of Notes. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee will authenticate new Notes that reflect any amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.
Section 10.05 Trustee or Collateral Agent to Sign Amendments, Etc.. The Trustee or the Collateral Agent, as the case may be, shall sign any amendment, supplement or waiver authorized pursuant to this Article 10 if the amendment, supplement or waiver does not affect the rights, duties, liabilities, indemnities or immunities of the Trustee or the Collateral Agent, as the case may be. The Company may not sign an amendment or supplemental indenture until its Board of Directors approves it. In executing any amendment, supplement or waiver, the Trustee and the Collateral Agent shall be entitled to receive and (subject to Section 8.01) shall be fully protected in relying upon, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Company and any Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof.
ARTICLE 11
Guarantees
Section 11.01 Guarantees. Subject to the limitations set forth in Section 11.04, the Guarantors hereby, jointly and severally, unconditionally Guarantee to each Holder of Notes and to the Trustee and their respective successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the Obligations of the Company hereunder or thereunder, that: (a) the principal of, premium, if any, and interest on the Notes shall be promptly paid in full when due, subject to any applicable grace period, whether at Stated Maturity, by acceleration, redemption, required purchase or repurchase or otherwise, and interest on the overdue principal of and interest on premium, if any, and interest, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at Stated Maturity, by acceleration, redemption, required purchase or repurchase or otherwise. In the event the Company fails to make payment when due, subject to any applicable grace period, of any amount so Guaranteed or any performance so Guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company or any Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than the payment in full of the amounts Guaranteed). Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company or another Guarantor, protest, notice and all demands whatsoever and covenant that the Notes Guarantees shall not be discharged except by complete performance of the obligations contained in the Indenture Documents. If any Holder or the Trustee is required by any court or otherwise to return to the Company or any of the Guarantors, or any Custodian or other similar official acting in relation to either the Company or any of the Guarantors, any amount paid either to the Trustee or to such Holder, the Notes Guarantees, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations Guaranteed hereby until payment in full of all obligations Guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations Guaranteed hereby may be accelerated as provided in Article 7 for the purposes of the Notes Guarantees, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations Guaranteed hereby and (y) in the event of any declaration of acceleration of such obligations as provided in Article 7, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of the Notes Guarantees. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Trustee or the Holders under the Notes Guarantees.
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Section 11.02 Additional Guarantors. To the extent not a party to this Indenture on the date hereof, each Guarantor shall execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit E hereto, pursuant to which it shall become a Guarantor under this Article 11 (a “New Guarantor”) and shall Guarantee the obligations of the Company under this Indenture and the Notes. Concurrently with the execution and delivery of such supplemental indenture, such New Guarantor shall deliver to the Trustee an Opinion of Counsel that the foregoing have been duly authorized, executed and delivered by such New Guarantor and that such New Guarantor’s Guarantee is a valid and legally binding obligation of such New Guarantor, enforceable against such New Guarantor in accordance with its terms, subject to customary limitations, qualifications, exceptions and assumptions.
The Notes Guarantee of any Guarantor shall be evidenced solely by its execution and delivery of this Indenture (or, in the case of any New Guarantor, a supplemental indenture thereto) and not by an endorsement on, or attachment to, any Note of any Notes Guarantee or notation thereof.
Each Guarantor hereby agrees that its Notes Guarantee set forth in Section 11.01 shall be and remain in full force and effect notwithstanding any failure to endorse on any Note a notation of such Notes Guarantee.
The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Notes Guarantees set forth in this Indenture on behalf of each of the Guarantors.
If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Notes Guarantee shall be valid nevertheless.
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Section 11.03 Releases of Guarantees. In the event of:
(a) the Company exercising its Legal Defeasance or Covenant Defeasance option with respect to the Notes in accordance with Article 9 or the satisfaction and discharge of this Indenture in accordance with Section 4.01; or
(b) a sale, issuance or other disposition of Capital Stock of a Guarantor to a Person that is not (either before or after giving effect to such transaction) a Subsidiary of the Company, if the sale, issuance or other disposition complies with Section 5.10 and the Guarantor ceases to be a wholly-owned Subsidiary of the Company as a result of such sale, issuance or other disposition (other than upon the basis of such Subsidiary ceasing to be a wholly-owned Subsidiary of the Company as a result of any transaction with a primary purpose to evade the requirement of such Subsidiary being or becoming a Guarantor under this Indenture) and so long as such Guarantor ceases to guarantee the Credit Agreement;
such Guarantor (and any of its Subsidiaries that are Guarantors) shall be automatically and unconditionally released and relieved of any obligations under its Notes Guarantee and the Indenture Documents. Upon delivery by the Company to the Trustee of an Officer’s Certificate and an Opinion of Counsel to the effect that such defeasance, discharge, sale, issuance, disposition or designation, as applicable, was made by the Company in compliance with all conditions precedent and covenants, if any, provided for in this Indenture for such action, then the Trustee or the Collateral Agent, as applicable, shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Notes Guarantee and the Indenture Documents.
Any Guarantor not released from its obligations under its Notes Guarantee shall remain liable for the full amount of principal of, premium, if any, and interest on the Notes and for the other obligations of any Guarantor under the Indenture Documents as provided in this Article 11.
Section 11.04 Limitation on Guarantor Liability. For purposes hereof, each Guarantor’s liability shall be that amount from time to time equal to the aggregate liability of such Guarantor under its Notes Guarantee, but shall be limited to the lesser of (a) the aggregate amount of the obligations of the Company under the Indenture Documents and (b) the amount, if any, which would not have (A) rendered such Guarantor “insolvent” (as such term is defined in the federal Bankruptcy Law and in the Debtor and Creditor Law of the State of New York), (B) left it with unreasonably small capital at the time its Notes Guarantee was entered into, or at the time such Guarantor Incurred liability thereunder, after giving effect to the Incurrence of Existing Indebtedness immediately prior to such time or (C) left such Guarantor with debts beyond such Guarantor’s ability to pay as such debts mature; provided that, it shall be a presumption in any lawsuit or other proceeding in which such Guarantor is a party that the amount Guaranteed pursuant to its Notes Guarantee is the amount set forth in subsection (a) above unless any creditor, or representative of creditors of such Guarantor, or debtor in possession or trustee in bankruptcy of such Guarantor, otherwise proves in such a lawsuit or other proceeding that the aggregate liability of such Guarantor is limited to the amount set forth in subsection (b). In making any determination as to the solvency or sufficiency of capital of a Guarantor in accordance with the previous sentence, the right of such Guarantor to contribution from other Guarantors and any other rights such Guarantor may have, contractual or otherwise, shall be taken into account.
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Section 11.05 “Trustee” to Include Paying Agent. In case at any time any Paying Agent other than the Trustee will have been appointed by the Company and be then acting hereunder, the term “Trustee” as used in this Article 11 shall in such case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were named in this Article 11 in place of the Trustee.
ARTICLE 12
Miscellaneous
Section 12.01 Notices. Any notice or communication by the Company, the Trustee or the Collateral Agent to the others is duly given if in writing and delivered in person or sent by first class mail (registered or certified, return receipt requested), telex, telecopier, overnight air courier guaranteeing next day delivery or other electronic means, to the others’ addresses:
If to the Company or any Guarantor:
CURO Group Holdings Corp.
200 W. Hubbard Street, 8th Flr
Chicago IL 60654
Attention: Legal Department
Electronic Mailing Address: [***]
With a copy to (which shall not constitute notice):
KIRKLAND & ELLIS LLP
2049 Century Park East, Suite 3700, Los Angeles, CA 90067
Electronic Mailing Address: [***]
Attention: [***]
If to the Trustee:
U.S. Bank Trust Company, National Association, as Trustee
100 Wall Street, Suite 600
New York, NY 1005
Attention: Administrator, CURO Group Holdings Corp.
If to the Collateral Agent:
U.S. Bank Trust Company, National Association, as Collateral agent
100 Wall Street, Suite 600
New York, NY 1005
Attention: Administrator, CURO Group Holdings Corp.
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The Company, the Trustee or the Collateral Agent, by notice to the others may designate additional or different addresses for subsequent notices or communications.
Any notice to any Guarantor may be sent to the Guarantor in care of the Company as set forth above.
All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; and at the time sent, if sent by e-mail, provided that notice to the Trustee will be effective only upon receipt.
Any notice or communication to a Holder shall be sent by first class mail, certified or registered, return receipt requested, by overnight air courier guaranteeing next day delivery or other electronic means reasonably satisfactory to the Trustee to its address shown on the register kept by the Registrar. Failure to send a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, provided that notice to the Trustee will be effective only upon receipt.
If the Company sends a notice or communication to Holders, it shall send a copy to the Trustee and each Agent at the same time.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
The Trustee will have the right, but shall not be required, to rely upon and comply with instructions and directions sent by e-mail, facsimile and other similar unsecured electronic methods by persons believed by the Trustee to be authorized to give instructions and directions on behalf of the Company or any Person. The Trustee will have no duty or obligation to verify or confirm that the Person who sent such instructions or directions is, in fact, a Person authorized to give instructions or directions on behalf of the Company or Guarantors; and the Trustee will have no liability for any losses, liabilities, costs or expenses incurred or sustained by the Company or Guarantors as a result of such reliance upon or compliance with such instructions or directions. The Company or Guarantors agree to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including, without limitation, the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.
Where this Indenture provides for notice of any event to a Holder of a Global Note, such notice shall be sufficiently given if given to the Depositary for such Note (or its designee), pursuant to its Applicable Procedures, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.
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Section 12.02 [Reserved].
Section 12.03 Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company or any Guarantor to the Trustee or the Collateral Agent, as the case may be, to take any action under the Indenture Documents, the Company will furnish to the Trustee:
(a) an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee or the Collateral Agent, as the case may be, (which shall include the statements set forth in Section 12.04) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee or the Collateral Agent, as the case may be, (which shall include the statements set forth in Section 12.04) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.
Section 12.04 Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture and shall include:
(a) a statement that the Person making such certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of any Person may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of, or representation by, counsel or any Opinion of Counsel may be based, insofar as it relates to factual matters, upon certificates of public officials or upon a certificate or opinion of, or representations by, an officer or officers of the Company or any Guarantor (including an Officer’s Certificate) stating that the information with respect to such factual matters is in the possession of the Company or such Guarantor unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
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Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
Section 12.05 Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
Section 12.06 No Personal Liability of Directors, Officers, Employees and Stockholders. No director, officer, employee or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Indenture Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the United States federal securities laws or other corporate laws, and it is the view of the SEC that such a waiver is against public policy.
Section 12.07 Governing Law. THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE.
Section 12.08 No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or the Company’s Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture and the Notes Guarantees.
Section 12.09 Successors. All agreements of the Company and each Guarantor in the Indenture Documents shall bind its successors. All agreements of the Trustee and the Collateral Agent in this Indenture shall bind their respective successors.
Section 12.10 Severability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
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Section 12.11 Counterpart Originals. The parties may sign any number of copies of this Indenture (including by electronic transmission). Each signed copy shall be an original, but all of them together represent the same agreement. Facsimile, documents executed, scanned and transmitted electronically and electronic signatures, including those created or transmitted through a software platform or application, shall be deemed original signatures for purposes of this Indenture and all matters and agreements related thereto, with such facsimile, scanned and electronic signatures having the same legal effect as original signatures. The parties agree that this Indenture or any instrument, agreement or document necessary for the consummation of the transactions contemplated by this Indenture or related hereto or thereto (including, without limitation, addendums, amendments, notices, instructions, communications with respect to the delivery of securities or the wire transfer of funds or other communications) (the “Executed Documentation”) may be accepted, executed or agreed to through the use of an electronic signature in accordance with applicable laws, rules and regulations in effect from time to time applicable to the effectiveness and enforceability of electronic signatures. Any Executed Documentation accepted, executed or agreed to in conformity with such laws, rules and regulations will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any third party electronic signature capture service providers as may be reasonably chosen by a signatory hereto or thereto. When the Trustee acts on any Executed Documentation sent by electronic transmission, the Trustee will not be responsible or liable for any losses, costs or expenses arising directly or indirectly from its reliance upon and compliance with such Executed Documentation, notwithstanding that such Executed Documentation (a) may not be an authorized or authentic communication of the party involved or in the form such party sent or intended to send (whether due to fraud, distortion or otherwise) or (b) may conflict with, or be inconsistent with, a subsequent written instruction or communication; it being understood and agreed that the Trustee shall conclusively presume that Executed Documentation that purports to have been sent by an authorized officer of a Person has been sent by an authorized officer of such Person. The party providing Executed Documentation through electronic transmission or otherwise with electronic signatures agrees to assume all risks arising out of such electronic methods, including, without limitation, the risk of the Trustee acting on unauthorized instructions and the risk of interception and misuse by third parties.
Section 12.12 Table of Contents, Headings, Etc.. The table of contents, cross-reference table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
Section 12.13 Intercreditor Agreements. Notwithstanding anything herein to the contrary, the lien and security interest granted pursuant to the Indenture Documents and the exercise of any right or remedy thereunder are subject to the provisions of the Intercreditor Agreements. In the event of any conflict between the terms of the Intercreditor Agreements and the other Indenture Documents, the terms of the Intercreditor Agreements shall govern and control. If any conflict or inconsistency exists between this Indenture and any Collateral Document (other than the Intercreditor Agreements), this Indenture shall govern.
Section 12.14 Payments Due on Non-Business Days. In any case where any interest payment date, redemption date, Purchase Date, Stated Maturity of the Notes or any other date upon which any payment is due on the Notes shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Notes) payment of interest or principal (and premium, if any) need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the interest payment date, redemption date, Purchase Date, at the Stated Maturity or any other date upon which any payment is due on the Notes, provided that no interest will accrue for the period from and after such interest payment date, redemption date, Purchase Date, Stated Maturity or other payment date, as the case may be.
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Section 12.15 Waiver of Jury Trial(a) . THE COMPANY, EACH GUARANTOR, THE TRUSTEE AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING DIRECTLY OR INDIRECTLY OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, ANY OTHER INDENTURE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
ARTICLE 13
Collateral and Security
Section 13.01 Collateral Documents. The due and punctual payment of the principal of, premium, if any, and interest on the Notes and amounts due hereunder and under the Notes Guarantees when and as the same shall be due and payable, subject to any applicable grace period, whether on an interest payment date, by acceleration, purchase, repurchase, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest to the extent permitted by law, on the Notes and the performance of all other Obligations of the Company and the Guarantors to the Holders, the Collateral Agent or the Trustee under the Indenture Documents are and shall be secured by the Collateral Documents. The Collateral Documents shall provide for the grant by the Company and the Guarantors party thereto to the Collateral Agent of security interests in the Collateral subject to Permitted Liens and the terms of the Intercreditor Agreements.
Section 13.02 Recording and Opinions.
(a) The Company will, and will cause each of the Guarantors to, at their sole cost and expense, take or cause to be taken such actions as may be required by the Collateral Documents and as the Collateral Agent shall reasonably request, to perfect, maintain (with the priority required under the Collateral Documents and Intercreditor Agreements), preserve and protect the valid and enforceable, perfected (except as expressly provided to the contrary herein or therein) security interests in and on all the Collateral granted by the Collateral Documents in favor of the Collateral Agent as security for the Obligations contained in this Indenture, the Notes, the Notes Guarantees and the Collateral Documents, superior to and prior to the rights of all third Persons (other than as set forth in the Intercreditor Agreements), and subject to no other Liens (other than Permitted Liens), including, without limitation, (i) the preparation and filing of financing statements, amendments and continuation statements, collateral assignments and any instruments of further assurance, in such manner and in such places as may be required by law to preserve and protect fully the rights of the Holders, the Collateral Agent, and the Trustee under this Indenture and the Collateral Documents to all property comprising the Collateral, and (ii) subject to the Intercreditor Agreements, the delivery of the certificates evidencing the securities pledged under the Collateral Documents, duly endorsed in blank or accompanied by undated stock powers or other instruments of transfer executed in blank, it being understood that concurrently with the execution of this Indenture, the Company and the Guarantors have submitted duly prepared financing statements to a reputable filing service for prompt filing in the appropriate filing offices. The Company will from time to time promptly pay all financing and continuation statement recording and/or filing fees, charges and recording, stamp, intangibles and similar taxes relating to this Indenture, the Collateral Documents and any amendments hereto or thereto and any other instruments of further assurance required pursuant hereto or thereto.
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Section 13.03 Release of Collateral.
(a) The Collateral Agent shall not at any time release all or any portion of the Collateral from the Liens created by the Collateral Documents unless such release is in accordance with the provisions of this Indenture and the applicable Collateral Documents.
(b) The release of any Collateral from the Liens created by the Collateral Documents shall not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent the Collateral is released pursuant to this Indenture and the Collateral Documents.
Section 13.04 Specified Releases of Collateral.
(a) Collateral shall be released from the Liens created by the Collateral Documents at any time or from time to time in accordance with the provisions of the Collateral Documents or as provided in this Indenture. The Liens securing the Collateral shall be automatically released without the need for any further action by any Person under any one or more of the following circumstances:
(i) to enable the Company or a Guarantor to consummate asset dispositions permitted or not prohibited under Section 5.10;
(ii) if any Guarantor is released from its Notes Guarantee in accordance with the terms of this Indenture (including by virtue of such Guarantor ceasing to be a Subsidiary of the Company), that Guarantor’s assets will also be released from the Liens securing its Notes Guarantee and the other Indenture Obligations;
(iii) if required in accordance with the terms of the Intercreditor Agreements;
(iv) as described under Section 13.05; or
(v) with the consent of the Holders in accordance with Section 10.02.
(b) Upon the written request of the Company accompanied by an Officer’s Certificate and Opinion of Counsel confirming that all conditions precedent hereunder and under the Collateral Documents and Intercreditor Agreements have been met, and any necessary or proper instruments of termination, satisfaction or release prepared by the Company or the Guarantors, as the case may be, the Collateral Agent, without the consent of any Holder or the Trustee and at the expense of the Company or the Guarantors, shall execute, deliver or acknowledge such instruments or releases to evidence the release from the Liens created by the Collateral Documents of any Collateral permitted to be released pursuant to this Indenture or the Collateral Documents.
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Section 13.05 Release upon Satisfaction or Defeasance of all Outstanding Obligations.
(a) The Liens on all Collateral that secure the Notes and the Notes Guarantees shall be automatically terminated and released without the need for further action by any Person:
(i) if the Company exercise Legal Defeasance or Covenant Defeasance as described under Article 9;
(ii) upon satisfaction and discharge of this Indenture as described under Section 4.01; or
(iii) upon payment in full in immediately available funds of the principal of, premium, if any, and accrued and unpaid interest on the Notes and all other Obligations under this Indenture and the Collateral Documents that are then due and payable (other than contingent indemnification obligations for which no claim has been asserted).
(b) Upon receipt of an Officer’s Certificate and Opinion of Counsel confirming that all conditions precedent hereunder and under the Collateral Documents have been satisfied and any necessary or proper instruments of termination, satisfaction or release prepared by the Company or the Guarantors, as the case may be, the Collateral Agent, without the consent of any Holder or the Trustee and at the expense of the Company or the Guarantors, shall execute, deliver or acknowledge such instruments or releases to evidence the release from the Liens created by the Collateral Documents of any Collateral permitted to be released pursuant to this Indenture and the Collateral Documents.
Section 13.06 Form and Sufficiency of Release and Subordination. In the event that the Company or any Guarantor has sold, exchanged, or otherwise disposed of or proposes to sell, exchange or otherwise dispose of any portion of the Collateral that may be sold, exchanged or otherwise disposed of by the Company or such Guarantor to any Person other than the Company or a Guarantor, and the Company or such Guarantor requests that the Trustee or Collateral Agent furnish a written disclaimer, release or quit-claim of any interest in such property under this Indenture and the Collateral Documents as accompanied by an Officer’s Certificate and Opinion of Counsel confirming that all conditions precedent hereunder and under the Collateral Documents and Intercreditor Agreements have been met in connection with such action, or, to the extent applicable to such Collateral, take all action that is necessary or reasonably requested by the Company (in each case at the expense of the Company) to release and reconvey to the Company or such Guarantor, without recourse, such Collateral or deliver such Collateral in its possession to the Company or such Guarantor, the Trustee and the Collateral Agent, as applicable, shall upon receipt of an Officer’s Certificate and Opinion of Counsel confirming that all conditions precedent hereunder and under the Collateral Documents and Intercreditor Agreements have been met in connection with such action, execute, acknowledge (without any recourse, representation and warranty) and deliver to the Company or such Guarantor (in the form prepared by the Company at the Company’s sole expense) such an instrument promptly or take such other action so requested after satisfaction of the conditions set forth herein for delivery of any such release. Notwithstanding the preceding sentence, all purchasers and grantees of any property or rights purporting to be released herefrom shall be entitled to rely upon any release executed by the Trustee or the Collateral Agent, as applicable, as sufficient for the purpose of this Indenture and as constituting a good and valid release of the property therein described from the Lien of this Indenture or of the Collateral Documents but shall have no recourse or claims against the Trustee or the Collateral Agent in respect of any such release. In addition to the foregoing, in the event that the Company or any Guarantor has any Collateral or intends to have any Collateral subject to a Permitted Lien of the type described in clause (7) of the definition thereof, and the Company or such Guarantor requests that the Trustee or Collateral Agent enter into a subordination agreement with the holder of such Permitted Lien in order to subordinate the Lien of the Collateral Agent in such Collateral to the Lien of such holder in such Collateral, the Trustee and the Collateral Agent, as applicable, shall, upon receipt of an Officer’s Certificate and Opinion of Counsel confirming that all conditions precedent hereunder and under the Collateral Documents and Intercreditor Agreements have been met in connection with such action, execute, acknowledge and deliver to the Company or such Guarantor or the holder of such Permitted Lien such an instrument (in the form prepared by the Company, or the holder of such Permitted Lien, at the Company’s sole expense) promptly after such request.
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Section 13.07 Purchaser Protected. No purchaser or grantee of any property or rights purported to have been released from the Lien of this Indenture or of the Collateral Documents shall be bound to ascertain the authority of the Trustee or the Collateral Agent, as applicable, to execute the release or to inquire as to the existence of any conditions herein prescribed for the exercise of such authority; nor shall any purchaser or grantee of any property or rights permitted by this Indenture to be sold or otherwise disposed of by the Company be under any obligation to ascertain or inquire into the authority of the Company to make such sale or other disposition.
Section 13.08 Authorization of Actions to be Taken by the Collateral Agent Under the Collateral Documents.
(a) Each Holder, by acceptance of the Notes, consents to the terms of, directs and agrees that the Collateral Agent shall execute and deliver the Intercreditor Agreements and Collateral Documents to which it is a party, and all agreements, documents and instruments incidental thereto, and act in accordance with the terms thereof and hereby appoints the Collateral Agent as its agent hereunder and under the Intercreditor Agreements and Collateral Documents and hereby irrevocably authorizes the Collateral Agent to take such action on its behalf under the provisions of this Indenture, the Intercreditor Agreements and Collateral Documents and to exercise such powers and perform such duties as are expressly delegated to the Collateral Agent by the terms of this Indenture, the Intercreditor Agreements and the Collateral Documents. For the avoidance of doubt, the Collateral Agent shall have no discretion under this Indenture, the Intercreditor Agreements or the Collateral Documents and shall not be required to make or give any determination, consent, approval, request or direction without the written direction of the Holders of a majority in aggregate principal amount of the then outstanding Notes, the Trustee or the Company, as applicable. The provisions of this Section 13.08 are solely for the benefit of the Collateral Agent and none of the Trustee, any of the Holders nor the Company or any of the Guarantors shall have any rights as a third party beneficiary of any of the provisions contained herein other than as expressly provided herein. Each Holder agrees that any action taken by the Collateral Agent in accordance with the provision of this Indenture, the Intercreditor Agreements and the Collateral Documents, and the exercise by the Collateral Agent of any rights or remedies set forth herein and therein shall be authorized and binding upon all Holders. Notwithstanding any provision to the contrary contained elsewhere in this Indenture, the Collateral Documents and the Intercreditor Agreements, the duties of the Collateral Agent shall be ministerial and administrative in nature, and the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein and in the other documents to which the Collateral Agent is a party, nor shall the Collateral Agent have or be deemed to have any trust or other fiduciary relationship with the Trustee, any Holder, the Company or any Guarantor, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Indenture, the Collateral Documents and the Intercreditor Agreements or otherwise exist against the Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Indenture with reference to the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
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(b) So long as an Event of Default is not continuing, the Company may direct the Collateral Agent in connection with any action required or permitted by this Indenture, the Collateral Documents or the Intercreditor Agreements. During the continuance of an Event of Default, the Trustee may direct the Collateral Agent in connection with any action required or permitted by this Indenture, the Collateral Documents or the Intercreditor Agreements.
(c) No provision of this Indenture, the Intercreditor Agreements or any Collateral Document shall require the Collateral Agent (or the Trustee) to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or thereunder or exercise any of its rights and powers at the request or direction of Holders (or the Trustee in the case of the Collateral Agent) if it shall not have received security or indemnity satisfactory to the Collateral Agent in its sole discretion against potential costs and liabilities incurred by the Collateral Agent relating thereto. Notwithstanding anything to the contrary contained in this Indenture, the Intercreditor Agreements or the Collateral Documents, in the event the Collateral Agent is entitled or required to commence an action to foreclose or otherwise exercise its remedies to acquire control or possession of the Collateral, the Collateral Agent shall not be required to commence any such action or exercise any remedy or to inspect or conduct any studies of any property under the mortgages or take any such other action if the Collateral Agent has determined that the Collateral Agent may incur personal liability as a result of the presence at, or release on or from, the Collateral or such property, of any hazardous substances unless the Collateral Agent has received security or indemnity from the Holders in an amount and in a form all satisfactory to the Collateral Agent in its sole discretion, protecting the Collateral Agent from all such liability. The Collateral Agent shall at any time be entitled to cease taking any action described above if it no longer reasonably deems any indemnity, security or undertaking from the Company or the Holders to be sufficient.
(d) The Collateral Agent (i) shall not be responsible or liable for any action taken or omitted to be taken by it in connection with this Indenture, the Intercreditor Agreements and the Collateral Documents or instrument referred to herein or therein, except to the extent that any of the foregoing result from its own gross negligence, bad faith or willful misconduct as determined by a court of competent jurisdiction in a final, non-appealable judgment, (ii) shall not be responsible or liable for any failure of the Company or any party to this Indenture, the Intercreditor Agreement or the Collateral Documents to perform its obligations hereunder or thereunder, (iii) shall not be responsible or liable for interest on any money received by it except as the Collateral Agent may agree in writing with the Company (and money held in trust by the Collateral Agent need not be segregated from other funds except to the extent required by law) and (iv) may consult with counsel of its selection and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it in good faith and in accordance with the advice or opinion of such counsel. The grant of permissive rights or powers to the Collateral Agent shall not be construed to impose duties to act.
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(e) The Collateral Agent may perform any of its duties under this Indenture, the Collateral Documents or the Intercreditor Agreements by or through receivers, agents, employees, attorneys, attorneys-in-fact, other experts or advisors or through its affiliates and shall be entitled to advice of counsel concerning all matters pertaining to such duties, and shall be entitled to act upon, and shall be fully protected in taking action in reliance upon any advice or opinion given by legal counsel, including counsel that is an employee of or counsel for the Company. The Collateral Agent shall not be responsible for the negligence or willful misconduct of any receivers, agents, employees, attorneys, attorneys-in-fact, other experts or advisors or through its affiliates receiver, agent, employee, attorney, attorney-in-fact, expert, advisor or affiliates that it selects.
Section 13.09 Authorization of Receipt of Funds by the Trustee Under the Collateral Documents.
The Collateral Agent is authorized to receive any funds for the benefit of itself, the Trustee and the Holders distributed under the Collateral Documents or the Intercreditor Agreements and, to the extent not prohibited under the Intercreditor Agreements, to make further distributions of such funds to itself, the Trustee and the Holders in accordance with the provisions of Section 7.10 and the other provisions of this Indenture. Such funds shall be held on deposit by the Trustee without investment, and the Trustee will have no liability for interest or other compensation thereon.
Section 13.10 Action by the Collateral Agent.
In each case that the Collateral Agent may or is required hereunder or under any Collateral Document to take any action (an “Action”), including to make any determination, to give consents, to exercise rights, powers or remedies, to release or sell Collateral or otherwise to act hereunder or under any Collateral Document, the Collateral Agent may seek direction from the Holders of a majority in aggregate principal amount of the then outstanding Notes; provided that all Actions so taken shall, at all times, be in compliance with the requirements of the Intercreditor Agreements. The Collateral Agent shall not be liable with respect to any Action taken or omitted to be taken by it in accordance with the direction from the Holders of a majority in aggregate principal amount of the then outstanding Notes. If the Collateral Agent shall request direction from the Holders of a majority in aggregate principal amount of the then outstanding Notes with respect to any Action, the Collateral Agent shall be entitled to refrain from such Action unless and until the Collateral Agent shall have received direction from the Holders of a majority in aggregate principal amount of the then outstanding Notes and security or an indemnification satisfactory to the Collateral Agent in its sole discretion, and the Collateral Agent shall not incur liability to any Person by reason of so refraining.
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Before the Collateral Agent acts or refrains from acting in each case at the request or direction of the Company, it may require an Officer’s Certificate and an Opinion of Counsel. The Collateral Agent shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion.
Notwithstanding anything to the contrary in this Indenture or any Collateral Document, in no event shall the Collateral Agent be responsible for, or have any duty or obligation with respect to, the recording, filing, registering, perfection, protection or maintenance of the security interests or Liens intended to be created by this Indenture or the Collateral Documents (including the preparation, filing or continuation of any Uniform Commercial Code financing or continuation statements or similar documents or instruments), nor shall the Collateral Agent be responsible for, and the Collateral Agent makes no representation regarding, the validity, enforceability, effectiveness or priority of any of the Collateral Documents or the security interests or Liens intended to be created thereby.
Section 13.11 Compensation and Indemnity.
(a) The Company will pay to the Collateral Agent from time to time compensation as shall be agreed to in writing by the Company and the Collateral Agent for its acceptance of this Indenture, the Intercreditor Agreements, the Collateral Documents and services hereunder. The Company will reimburse the Collateral Agent promptly upon request for all reasonable disbursements, advances and out-of-pocket expenses incurred or made by it in connection with the Collateral Agent’s duties under the Indenture Documents, including the reasonable compensation, disbursements and expenses of the Collateral Agent’s agents, reasonably retained professional advisors, and counsel, except any disbursement, advance or expense as may be attributable to the Collateral Agent’s willful misconduct or gross negligence.
(b) The Company and the Guarantors shall, jointly and severally, indemnify the Collateral Agent against any and all claims, demands, causes of action, losses, liabilities, damages, fines, penalties, costs, fees, charges or expenses including taxes (other than taxes based on, measured by or determined by income of the Collateral Agent) incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, the Intercreditor Agreements and the Collateral Documents, including (i) any claim relating to the grant to the Collateral Agent of any Lien in any property or assets of the Company or the Guarantors and (ii) the costs and expenses of enforcing this Indenture, the Intercreditor Agreements and the Collateral Documents against the Company and the Guarantors (including this Section 13.11) and defending itself against any claim (whether asserted by the Company, the Guarantors, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder or thereunder, except to the extent any such loss, liability or expense may be attributable to its gross negligence, bad faith or willful misconduct. The Collateral Agent shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Collateral Agent to so notify the Company will not relieve the Company or the Guarantors of their obligations hereunder, except to the extent the Company is materially prejudiced thereby. The Company or such Guarantor shall defend such claim and the Collateral Agent shall cooperate in the defense. In the event the Collateral Agent is advised by counsel that a conflict of interest exists, the Collateral Agent may have its own separate counsel, and the Company will pay the reasonable fees and expenses of such counsel. Neither the Company nor any Guarantor need pay for any settlement made without its consent, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary herein, the Company need not reimburse the Collateral Agent for any cost or expense or indemnify it against any loss or liability incurred by the Collateral Agent through its own gross negligence, bad faith or willful misconduct. The Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless a Responsible Officer of the Collateral Agent shall have received written notice from the Trustee or the Company referring to this Indenture describing such Default or Event of Default and stating that such notice is a “notice of default.” The Collateral Agent shall take such action with respect to such Default or Event of Default as may be requested by the Trustee in accordance with the Indenture or the holders of a majority in aggregate principal amount of the Notes then outstanding in accordance with the terms of the Indenture.
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(c) The obligations of the Company and the Guarantors under this Section 13.11 shall survive the satisfaction and discharge of this Indenture and the resignation, removal or replacement of the Collateral Agent.
Section 13.12 Co-Collateral Agent; Separate Collateral Agent.
(a) If at any time or times it shall be necessary in order to conform to any applicable law of any jurisdiction in which any of the Collateral shall be located, or to avoid any violation of applicable law or imposition on the Collateral Agent of taxes by such jurisdiction not otherwise imposed on the Collateral Agent, or the Collateral Agent shall be advised by counsel, satisfactory to it, that it is necessary in the interests of the Notes Secured Parties, or the Collateral Agent shall deem it desirable for its own protection in the performance of its duties hereunder or under any Collateral Document, the Collateral Agent and the Company and the Guarantors may (and in the case of conforming to any applicable law or avoiding the violation of any applicable law, shall) execute and deliver all instruments and agreements necessary or proper to constitute another bank or trust company, or one or more persons approved by the Collateral Agent and the Company, either to act as co-collateral agent or co-collateral agents of all or any of the Collateral under this Indenture or under any of the Collateral Documents, jointly with the Collateral Agent originally named herein or therein or any successor Collateral Agent, or to act as separate agent or agents of any of the Collateral. If (x) the Company and the Guarantors shall not have joined in the execution of such instruments and agreements within 10 days after they receive a written request from the Collateral Agent to do so, and (y) the execution of such instruments and agreements is being undertaken in order to conform to any applicable law of any jurisdiction in which any of the Collateral shall be located, or to avoid any violation of applicable law, then the Collateral Agent acting as directed by a majority of Holders shall act under the foregoing provisions of this Section 13.12 without the concurrence of the Company and the Guarantors and execute and deliver such instruments and agreements on behalf of the Company and the Guarantors and any such act shall be binding on the Company and the Guarantors as if executed by the Company and the Guarantors. Each of the Company and each Guarantor hereby appoint the Collateral Agent as its agent and attorney to act for it under the foregoing provisions of this Section 13.12 in either of such contingencies.
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(b) Every separate collateral agent and every co-collateral agent, other than any successor Collateral Agent appointed pursuant to this Article, shall, to the extent permitted by law, be appointed and act and be such, subject to the following provisions and conditions:
(1) all rights, powers, duties and obligations conferred upon the Collateral Agent in respect of the custody, control and management of moneys, papers or securities shall be exercised solely by the Collateral Agent or any agent appointed by the Collateral Agent;
(2) all rights, powers, duties and obligations conferred or imposed upon the Collateral Agent hereunder and under the relevant Collateral Documents shall be conferred or imposed and exercised or performed by the Collateral Agent and such separate collateral agent or separate collateral agents or co-collateral agent or co-collateral agents, jointly, as shall be provided in the instrument appointing such separate collateral agents or co-collateral agent or co-collateral agents, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Collateral Agent shall be incompetent or unqualified to perform such act or acts, or unless the performance of such act or acts would result in the imposition of any tax on the Collateral Agent which would not be imposed absent such joint act or acts, in which event such rights, powers, duties and obligations shall be exercised and performed by such separate collateral agent or collateral agents or co-collateral agent or co-collateral agents;
(3) no power given hereby or by the relevant Collateral Documents to, or which it is provided herein or therein may be exercised by, any such co-collateral agent or co-collateral agents or separate collateral agent or collateral agents shall be exercised hereunder or thereunder by such co-collateral agent or co-collateral agents or separate collateral agent or collateral agents except jointly with, or with the consent in writing of, the Collateral Agent, anything contained herein to the contrary notwithstanding; and
(4) no collateral agent hereunder shall be personally liable by reason of any act or omission of any other collateral agent hereunder.
[Signatures on following pages]
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first written above.
| CURO group Holdings CORP. | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | Chief Executive Officer | |
| GUARANTORS: | ||
| CURO FINANCIAL TECHNOLOGIES CORP. | ||
| CURO INTERMEDIATE HOLDINGS CORP. | ||
| CURO MANAGEMENT LLC | ||
| FIRST HERITAGE CREDIT, LLC | ||
| FIRST HERITAGE CREDIT OF ALABAMA, LLC | ||
| FIRST HERITAGE CREDIT OF LOUISIANA, LLC | ||
| FIRST HERITAGE CREDIT OF MISSISSIPPI, LLC | ||
| FIRST HERITAGE CREDIT OF SOUTH CAROLINA, LLC | ||
| FIRST HERITAGE CREDIT OF TENNESSEE, LLC | ||
| SOUTHERNCO, INC. | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
| ATTAIN FINANCE, LLC | ||
| AD ASTRA RECOVERY SERVICES, INC. | ||
| CURO VENTURES, LLC | ||
| CURO COLLATERAL SUB, LLC | ||
| CURO CREDIT, LLC | ||
| HEIGHTS FINANCING HOLDING CO. | ||
| SOUTHERN FINANCE OF SOUTH CAROLINA, INC. | ||
| SOUTHERN FINANCE OF TENNESSEE, INC. | ||
| COVINGTON CREDIT OF ALABAMA, INC. | ||
| QUICK CREDIT CORPORATION | ||
| COVINGTON CREDIT, INC. | ||
| COVINGTON CREDIT OF GEORGIA, INC. | ||
| COVINGTON CREDIT OF TEXAS, INC. | ||
| HEIGHTS FINANCE CORPORATION | ||
| HEIGHTS FINANCE CORPORATION | ||
| By: | /s/ Gary L. Fulk | |
| Name: | Gary L. Fulk | |
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, As trustee AND COLLATERAL AGENT | ||
| By: | /s/ Christopher J. Grell | |
| Name: | Christopher J. Grell | |
| Title: | Vice President | |
EXHIBIT A
[Form of Face of Note]
[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]
| A-1 |
CURO group Holdings CORP.
7.500% SENIOR 1.5 LIEN SECURED NOTE DUE 2028
CUSIP [__________]
| No. [__________] | $[__________] |
CURO Group Holdings Corp., a Delaware corporation (the “Company,” which term includes any successor entity), for value received promises to pay to [_______________] or its registered assigns, the principal sum of [_____________________] (or such principal amount as may be set forth in the records of the Trustee hereinafter referred to in accordance with the Indenture) on August 1, 2028, and to pay interest thereon as hereinafter set forth.
Interest Payment Dates: February 1 and August 1, commencing August 1, 2023
Record Dates: January 15 and July 15
Dated: May 15, 2023
Reference is made to the further provisions of this Note contained on the reverse side of this Note, which shall for all purposes have the same effect as if set forth at this place.
| A-2 |
IN WITNESS HEREOF, the Company has caused this instrument to be duly executed.
| CURO Group Holdings CORP. | ||
| By: | ||
| Name: | ||
| Title: | ||
| A-3 |
Trustee Certificate of Authentication
This Note is one of the 7.500% Senior 1.5 Lien Secured Notes due 2028 referred to in the within-mentioned Indenture.
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Dated: | ||||
| A-4 |
[Form of
Back of Note]
7.500% Senior 1.5 Lien Secured Notes due 2028
Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
1. Interest. CURO Group Holdings Corp., a Delaware corporation (the “Company”), promises to pay interest on the principal amount of this Note at 7.500% per annum from February 1, 2023 (being the most recent interest payment date in respect of the Existing Notes in exchange for which the Notes were issued and interest from such date through the Issue Date being paid in consideration for accrued and unpaid interest on the exchanged Existing Notes through the date of such exchange) until maturity. The Company will pay interest semi-annually in arrears every February 1 and August 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day and no interest shall accrue for the intervening period (each, an “Interest Payment Date”). Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from February 1, 2023; provided, that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be August 1, 2023. The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at such increased rate to the extent lawful. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders at the close of business on January 15 or July 15 (whether or not a Business Day), as the case may be, immediately preceding the Interest Payment Date, even if such Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes shall be payable as to principal, premium, if any, and interest at the office or agency of the Company maintained for such purpose, or, at the option of the Company, by check mailed to the Holders at their respective addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of, premium, if any, and interest on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Company. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Holders must surrender the Notes to the Company, the Registrar or the Paying Agent to collect payments of principal on the Notes.
3. Paying Agent and Registrar. Initially, U.S. Bank Trust Company, National Association, as the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.
| A-5 |
4. Indenture. The Company issued the Notes under an Indenture, dated as of May 15, 2023 (as amended, supplemented or otherwise modified from time to time, the “Indenture”), among the Company, the Guarantors, the Trustee and the Collateral Agent. This Note is one of a duly authorized issue of notes of the Company designated as its 7.500% Senior 1.5 Lien Secured Notes due 2028. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by express reference to the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb) (the “TIA”). The Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.
5. Optional Redemption.
(a) On and after August 1, 2024, the Company may on one or more occasions redeem the Notes, in whole or in part, upon notice pursuant to Section 7, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest to the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on August 1 of each of the years set forth below.
| Year | Percentage | |||
| 2024 | 103.750 | % | ||
| 2025 | 101.875 | % | ||
| 2026 and thereafter | 100.000 | % | ||
(b) Prior to August 1, 2024, the Company may, upon notice pursuant to Section 7, redeem up to 40% of the aggregate principal amount of the Notes (including Additional Notes) issued under the Indenture at a redemption price of 107.500% of the principal amount of the Notes redeemed, plus accrued and unpaid interest to the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date) if:
(1) such redemption is made with the proceeds of one or more Equity Offerings;
(2) at least 50% of the aggregate principal amount of the Notes (including any Additional Notes) issued under the Indenture remain outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company or any of its Subsidiaries); and
(3) the redemption occurs within 180 days of such Equity Offering.
(c) Prior to August 1, 2024, upon notice pursuant to Section 7, the Company may redeem up to 10% of the aggregate principal amount of the Notes (including Additional Notes) issued under the Indenture during each 12-month period following the Issue Date at a redemption price of 103% of the principal amount of the Notes redeemed, plus accrued and unpaid interest to the redemption date (subject to the right of holders of the Notes on the relevant record date to receive interest due on the relevant interest payment date).
| A-6 |
(d) Prior to August 1, 2024, the Company may redeem the Notes, in whole or in part, upon notice pursuant to Section 7, at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).
(e) Notwithstanding the foregoing, in connection with any tender offer for the Notes, including a Change of Control Offer or an Asset Sale Offer, if holders of not less than 90% in aggregate principal amount of the then outstanding Notes validly tender and do not withdraw such Notes in such tender offer and the Company (or any third party making such tender offer in lieu of the Company as described above) purchases all of the Notes held by such holders, the Company will have the right, upon not less than 10 nor more than 60 days’ prior notice, given not more than 30 days following the purchase pursuant to the tender offer described above, to redeem all of the Notes that remain outstanding following such purchase at a redemption price equal to the price paid to each other holder in such tender offer (which may be less than par) plus accrued and unpaid interest, if any, on the Notes that remain outstanding, to the applicable date of redemption, subject to the rights of holders on the relevant regular record date to receive interest due on the relevant interest payment date that is on or prior to the applicable redemption date.
(f) Any redemption pursuant to this Section 5 shall be made pursuant to the provisions of Section 3.01 through 3.06 of the Indenture.
6. Mandatory Redemption. Except as set forth in Sections 5.10 and 5.14 of the Indenture, the Company is not required to make mandatory redemption or sinking fund payments or offers to purchase with respect to the Notes.
7. Notice of Redemption. Notice of redemption will be sent by first-class mail or other electronic means reasonably satisfactory to the Trustee at least 10 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be sent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 in excess thereof, unless all of the Notes held by a Holder are to be redeemed. Notice of any redemption upon any Equity Offering or other securities offering or financing, or in connection with a transaction (or series of related transactions) that constitute a Change of Control, may, in the Company’s discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering, securities offering, financing or Change of Control. If such redemption is so subject to satisfaction of one or more conditions precedent, such notice shall describe each such condition, and if applicable, such notice shall state that, in the Company’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied or waived, and shall state that such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date so delayed. In addition, the Company may provide in such notice that payment of the redemption price and performance of the Company’s obligations with respect to such redemption may be performed by another Person. On and after the redemption date, unless the Company defaults in the payment of the redemption price, interest will cease to accrue on the principal amount of the Notes or portions thereof called for redemption, and for which funds have been set aside for payment.
| A-7 |
8. Offer to Purchase. Sections 5.10 and 5.14 of the Indenture provide that after certain Asset Sales or upon the occurrence of a Change of Control, subject to further limitations contained therein, the Company will make an offer to purchase Notes in accordance with the procedures set forth in the Indenture.
9. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. None of the Trustee, the Registrar or the Company is required to transfer or exchange any Note selected for redemption, except for the unredeemed portion of the Note being redeemed in part. Also, none of the Registrar, the Trustee or the Company is required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.
10. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes. Only registered Holders shall have rights under the Indenture, the Intercreditor Agreements and the Collateral Documents.
11. Unclaimed Money. If any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on any Note remains unclaimed for two years, the Trustee or Paying Agent will pay the money back to the Company at its request or, if then held by the Company, will be discharged from such trust. After any such payment, any Holder of a Note entitled to the money must look, as an unsecured creditor, only to the Company and not the Trustee or Paying Agent for payment, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, will thereupon cease.
12. Discharge and Defeasance. Subject to the conditions set forth in the Indenture, the Company and the Guarantors at any time shall be entitled to terminate some or all of their obligations under the Indenture and the Notes or the Notes Guarantees, as applicable, if the Company deposits with the Trustee cash in U.S. dollars or non-callable U.S. Government Obligations for the payment of the principal of, premium, if any, and interest on the Notes to redemption or Stated Maturity, as the case may be.
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13. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture Documents may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes), and any existing Default or Event of Default or compliance with any provision of the Indenture Documents may be waived with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including consents obtained in connection with the purchase of, or tender offer or exchange offer for, the Notes), in each case without notice to any other Holder, but subject to Section 5.20 of the Indenture. Without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder): (1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; (2) reduce or forgive the principal of, premium, if any, or extend the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than the provisions of Sections 3.09, 5.10 and 5.14 of the Indenture prior to the time at which an obligation to make such an offer has arisen); (3) reduce the rate of or extend the time for payment of interest, including default interest, on any Note; (4) waive a Default in the payment of principal of, premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration); (5) make any Note payable in money other than that stated in the Notes; (6) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of, premium, if any, or interest on the Notes; (7) release any Guarantor from any of its obligations under its Notes Guarantee or the Indenture, except in accordance with the terms of the Indenture; or (8) make any change to paragraphs (a) to (h) of Section 10.02 of the Indenture. Without the consent (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes) of Holders of at least 90% of the aggregate principal amount of the Notes then outstanding, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder): (1) release all or substantially all of the value of the Notes Guarantees or release all or substantially all of the Collateral; or (2) subordinate the Notes or any Notes Guarantees to any other Indebtedness or subordinate the Liens of the Notes Secured Parties on the Collateral to Liens securing other Indebtedness, other than the subordination of the Liens of the Notes Secured Parties to (i) Liens that are expressly permitted by the Indenture as in effect prior to such amendment to be senior in priority to the Notes Secured Parties’ Liens on the Collateral, (ii) Liens securing Indebtedness for borrowed money (and not, for the avoidance of doubt, Indebtedness incurred in exchange for existing Indebtedness, including the Notes) or (iii) Liens securing Indebtedness which was offered to Holders ratably in accordance with the principal amount of their Notes; provided that this clause (2) will not apply to any transaction during the pendency of any case or proceeding of the Company under any Bankruptcy Law. Notwithstanding the foregoing, without the consent of any Holder, the Company, the Trustee and the Collateral Agent may amend, supplement or waive any provision of the Indenture Documents to: (1) cure any ambiguity, defect, mistake or inconsistency or to make a modification of a formal, minor or technical nature or to correct a manifest error, (2) provide for uncertificated Notes in addition to or in place of certificated Notes, (3) comply with the covenant relating to mergers, consolidations and sales of assets; (4) provide for the assumption of the Company’s or any Guarantor’s obligations to Holders in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Guarantor’s assets, (5) add Guarantees with respect to the Notes or to secure the Notes, (6) add to the covenants of the Company or any Guarantor for the benefit of the Holders or surrender any right or power conferred upon the Company or any Guarantor, (7) make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under the Indenture Documents of any such Holder, (8) if it becomes necessary to qualify the Indenture under the TIA, comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, (9) (i) enter into additional or supplemental Collateral Documents, (ii) release Collateral or Guarantors in accordance with the terms of the Indenture and the Collateral Documents or (iii) enter into any replacement intercreditor agreements substantially in the form of the Intercreditor Agreements entered into on the Issue Date or any other additional or supplemental intercreditor agreements in connection with the incurrence of any additional Indebtedness permitted under the Indenture, in form and substance approved by the Company as evidenced by the Company’s execution thereof and the Collateral Agent as evidenced by the Collateral Agent’s execution thereof, (10) evidence and provide for the acceptance and appointment under the Indenture of a successor trustee pursuant to the requirements thereof, (11) make any amendment to the provisions of the Indenture relating to the transfer and legending of Notes as permitted by the Indenture, including to facilitate the issuance and administration of the Notes or to comply with the rules of any applicable securities depository; provided, however, that (i) compliance with the Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes or (12) provide for or confirm the issuance of Additional Notes in accordance with the terms of the Indenture. The consent of Holders is not necessary under the Indenture to approve the particular form of any proposed amendment, supplement or waiver. It is sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under the Indenture becomes effective, the Company is required to send to Holders a notice briefly describing such amendment, supplement or waiver. However, the failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of the amendment, supplement or waiver. Notwithstanding anything to the contrary herein, Sections 5.24, 5.25 and 5.26 of the Indenture (including, in each case, any definitions used therein or related definitions) shall be automatically deemed to have been amended, modified, supplemented or waived, as applicable, to match the corresponding provision in the Credit Agreement (as amended, modified, supplemented or waived) without further action of any other Person (including, without limitation, the Holders of the Notes), if (i) the Required Term Lenders consent to an amendment, modification, supplement or waiver of the corresponding provision in the Credit Agreement and (ii) the Company deliver an Officer’s Certificate to the Trustee certifying that such amendments have occurred under the Credit Agreement and attaching a copy of such amendment, modification, supplement or waiver.
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14. Defaults and Remedies.
(a) Under the Indenture, “Events of Default” include: (i) default for 5 Business Days in the payment when due of interest on the Notes; (ii) default in payment when due of the principal, or premium, if any, of any Note when due at maturity, upon optional redemption, upon required purchase, upon acceleration or otherwise; (iii) (a) failure by the Company or any of its Subsidiaries to comply with its obligations under Sections 5.07, 5.09, 5.10, 5.11, 5.12, 5.13, 5.14, 5.23, 5.24, 5.25, 5.26(c), 5.26(e) or Article 6 of the Indenture or (b) failure by the Company or any of its Subsidiaries to comply with its obligations under Section 5.08, 5.17, 5.26(a), or 5.26(d) of the Indenture or the Credit Agreement Side Letter (as defined in the Credit Agreement) and such failure continues for 10 days; (iv) failure to perform any other covenant or agreement of the Company or any of its Subsidiaries under the Indenture Documents for 30 days after written notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding voting as a single class (with a copy to the Trustee); (v) (A) default under any Indebtedness (other than the Notes or any Qualified Receivables Facility) of the Company or any of its Subsidiaries (or the payment of which is Guaranteed by the Company or any of its Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default (1) is a Payment Default, or (2) results in the acceleration of such Indebtedness prior to its final stated maturity or in the requirement for the Company to offer to repurchase, prepay, defease or redeem such Indebtedness prior to its final stated maturity, provided that this clause (A)(2) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness and such Indebtedness is repaid when required under the documents providing for such Indebtedness and, further provided that in each case under clauses (A)(1) and (A)(2), either (I) such Indebtedness consists of the Credit Agreement or the Existing Notes Indenture or (II) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or there has been such a default, aggregates in excess of $10.0 million (or its foreign currency equivalent); or (B) the occurrence of an “Event of Default” or other similar event or circumstance under the Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility or any other Qualified Receivables Facility, in each case, after giving effect to any grace period therein, that either (A) results in the acceleration of all or any portion of such Indebtedness prior to its final stated maturity or (B) has not been remedied (by amendment, cure, waiver or otherwise) thereunder within thirty (30) days after the related lenders thereunder received notice of the occurrence of such “Event of Default” (or other similar event or circumstance); (vi) failure by the Company or any of its Subsidiaries to pay final judgments which are non-appealable aggregating in excess of $10.0 million (or its foreign currency equivalent) (not covered by independent third-party insurance as to which liability has not been denied by such insurance carrier), which judgments are not paid, discharged or stayed for a period of 30 days following such judgment becoming final, and in the event such judgment is covered by insurance, any enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed; (vii) (A) any security interest created by any Collateral Document ceases to be in full force and effect (except as permitted by the terms of the Indenture or the Collateral Documents); provided that, such cessation, individually or in the aggregate, results in Collateral having a Fair Market Value in excess of $10,000,000 not being subject to a valid, perfected security interest or (B) (1) any Company Party shall deny its obligations under any Indenture Document (to which it is a party) or (2) any material provision of any Indenture Document, after delivery thereof in accordance with the terms thereof, shall for any reason cease to be valid and binding upon, or enforceable against, any Company Party; (viii) except as permitted by the Indenture, any Notes Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Notes Guarantee; and (ix) certain events of bankruptcy or insolvency with respect to the Company, or any Significant Subsidiary of the Company or any group of Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company.
| A-10 |
(b) If any Event of Default (other than an Event of Default specified in subsection (i) or (j) of Section 7.01 of the Indenture occurs and is continuing and has not been waived by the Holders, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in subsection (i) or (j) of Section 7.01 of the Indenture occurs, all outstanding Notes shall be due and payable immediately without further action or notice. The Holders of at least a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, premium, if any, or interest that has become due solely because of the acceleration) have been cured or waived and all sums paid or advanced by the Trustee under the Indenture and the reasonable compensation, expenses, disbursements, and advances of the Trustee and its agents and counsel have been paid or deposited with the Trustee or provision therefor satisfactory to the Trustee has been made. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of at least a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, premium, if any, or interest) if it determines that withholding notice is in their interest.
(c) The Holders of at least a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of principal, premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration).
| A-11 |
(d) In the event of any Event of Default specified in clause (a)(v) above, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose the Company delivers an Officer’s Certificate to the Trustee stating that:
(i) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged; or
(ii) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default;
(iii) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction; and
(iv) all existing Events of Default, except nonpayment of principal, premium or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.
(e) The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture and the Company is required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.
15. No Recourse Against Others. No past, present or future director, officer, employee or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Indenture Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the United States federal securities laws or other corporate laws, and it is the view of the SEC that such a waiver is against public policy.
| A-12 |
16. Authentication. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.
17. Trustee Dealings with the Company. The Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest as defined by the TIA it must eliminate such conflict within 90 days or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 8.10 and 8.11 of the Indenture.
18. Governing Law. THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF SHALL GOVERN AND BE USED TO CONSTRUE THIS NOTE AND THE INDENTURE.
19. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
20. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the correctness or accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
21. Guarantees. The payment of the principal of, premium, if any, and interest on the Notes, is unconditionally guaranteed, jointly and severally, by the Guarantors to the extent set forth in and subject to the provisions of the Indenture.
22. Security. Subject to the terms of the Intercreditor Agreements, the Obligations of the Company and the Guarantors under the Notes and the Notes Guarantees are secured by Liens on the Collateral pursuant to the terms of the Collateral Documents. The actions of the Trustee, the Collateral Agent and the Holders and the application of proceeds from the enforcement of any remedies with respect to such Collateral are limited pursuant to the terms of the Collateral Documents and the Intercreditor Agreements.
| A-13 |
The Company will furnish to any Holder upon written request and without charge a copy of the Indenture, the Collateral Documents and the Intercreditor Agreements. Requests may be made to the Company at the following address:
CURO Group Holdings Corp.
200 West Hubbard Street, 8th Floor
Chicago, Il,
60654
Attention: Chief Legal Officer
| A-14 |
Assignment Form
To assign this Note, fill in the form below:
| (I) or (we) assign and transfer this Note to: | |
| (Insert assignee’s legal name) |
(Insert assignee’s soc. sec. or tax I.D. no.)
(Print or type assignee’s name, address and zip code)
| and irrevocably appoint |
to transfer this Note on the books of the Company. The agent may substitute another to act for it.
Date: ____________________
| Your Signature: | |
| (Sign exactly as your name appears on the face of this Note) |
Signature Guarantee*:________________
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
| A-15 |
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company pursuant to Section 5.10 or 5.14 of the Indenture, check the appropriate box below:
¨ Section 5.10 ¨ Section 5.14
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 5.10 or 5.14 of the Indenture, state the amount you elect to have purchased:
| $ |
Date: ____________________
| Your Signature: | ||
| (Sign exactly as your name appears on the face of this Note) | ||
| Tax Identification No.: | ||
Signature Guarantee*:_____________
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
| A-16 |
Schedule of Exchanges of Interests
in the Global Note*
The initial outstanding principal amount of this Global Note is $____________. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
| Date
of Exchange | Amount
of Decrease in Principal Amount of this Global Note | Amount
of Increase in Principal Amount of this Global Note | Principal
Amount of this Global Note Following such Decrease or Increase | Signature
of Authorized Signatory of Trustee or Custodian | ||||
* This schedule should be included only if the Note is issued in global form.
| A-17 |
EXHIBIT B
Form of Certificate of Transfer
CURO Group Holdings Corp.
200 West Hubbard Street, 8th Floor
Chicago, Il,
60654
Attention: Chief Legal Officer
U.S. Bank Trust Company, National Association, as Trustee and Registrar
[ ]
Attention: [ ]
Telephone No.: [ ]
Re: 7.500% Senior 1.5 Lien Secured Notes due 2028
Reference is hereby made to the Indenture, dated as of May 15, 2023 (the “Indenture”), among CURO Group Holdings Corp., a Delaware corporation (the “Company”), the Guarantors and U.S. Bank Trust Company, National Association, as Trustee and as Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
___________________ (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $_________ in such Note[s] or interests (the “Transfer”), to _________________ (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. ¨ Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.
| B-1 |
2. ¨ Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Restricted Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed Transfer is being made prior to the expiration of the Restricted Period, the Transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.
3. ¨ Check and complete if Transferee will take delivery of a beneficial interest in the AI Global Note or a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):
(a) ¨ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;
or
(b) ¨ such Transfer is being effected to the Company or a Subsidiary thereof;
or
(c) ¨ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;
or
(d) ¨ such Transfer is being effected to an Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the AI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act.
| B-2 |
4. ¨ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) ¨ Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(b) ¨ Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) ¨ Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.
| B-3 |
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
| [Insert Name of Transferor] | ||
| By: | ||
| Name: | ||
| Title: | ||
Dated: _________________
| B-4 |
Annex A to Certificate of Transfer
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) ¨ a beneficial interest in the:
(i) ¨ 144A Global Note (CUSIP _________), or
(ii) ¨ Regulation S Global Note (CUSIP _________), or
(iii) ¨ AI Global Note (CUSIP _________); or
(b) ¨ a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) ¨ a beneficial interest in the:
(i) ¨ 144A Global Note (CUSIP _________), or
(ii) ¨ Regulation S Global Note (CUSIP _________), or
(iii) ¨ AI Global Note (CUSIP _________), or
(iv) ¨ Unrestricted Global Note (CUSIP _________); or
(b) ¨ a Restricted Definitive Note; or
(c) ¨ an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
EXHIBIT C
Form of Certificate of Exchange
CURO Group Holdings Corp.
200 West Hubbard Street, 8th Floor
Chicago, Il,
60654
Attention: Chief Legal Officer
U.S. Bank Trust Company, National Association, as Trustee and Registrar
[ ]
Attention: [ ]
Telephone No.: [ ]
Re: 7.500% Senior 1.5 Lien Secured Notes due 2028
Reference is hereby made to the Indenture, dated as of May 15, 2023 (the “Indenture”), among CURO Group Holdings Corp., a Delaware corporation (the “Company”), the Guarantors and U.S. Bank Trust Company, National Association, as Trustee and as Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
________________ (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $_________ in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note
(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(b) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
C-1
(c) ¨ Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(d) ¨ Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes
(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.
(b) ¨ Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] ¨ 144A Global Note,¨ Regulation S Global Note, ¨ AI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.
C-2
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
| [Insert Name of Owner] | ||
| By: | ||
| Name: | ||
| Title: | ||
Dated: _______________
C-3
EXHIBIT D
Form of
Certificate From
Acquiring Accredited Investor
CURO Group Holdings Corp.
200 West Hubbard Street, 8th Floor
Chicago, Il,
60654
Attention: Chief Legal Officer
U.S. Bank Trust Company, National Association, as Trustee and Registrar
[ ]
Attention: [ ]
Telephone No.: [ ]
Re: 7.500% Senior 1.5 Lien Secured Notes due 2028
Reference is hereby made to the Indenture, dated as of May 15, 2023 (the “Indenture”), among CURO Group Holdings Corp., a Delaware corporation (the “Company”), the Guarantors and U.S. Bank Trust Company, National Association, as Trustee and as Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $_______________ aggregate principal amount of:
(a) ¨ a beneficial interest in a Global Note, or
(b) ¨ a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).
2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144 under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.
D-1
3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.
4. We are an “accredited investor” (as defined in Rule 501(a) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an “accredited investor”) as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.
| [Insert Name of Accredited Investor] | ||
| By: | ||
| Name: | ||
| Title: | ||
Dated:_____________
D-2
EXHIBIT E
[Form of Supplemental Indenture]
SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of [_________], among CURO Group Holdings Corp. (the “Company”), [_________] (the “New Guarantor”) and U.S. Bank Trust Company, National Association, as Trustee (the “Trustee”).
W I T N E S E T H
WHEREAS, the Company and the Guarantors have heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of May 15, 2023, providing for the issuance of 7.500% Senior 1.5 Lien Secured Notes due 2028 (the “Notes”).
WHEREAS, Section 5.17 of the Indenture provides that under certain circumstances the Company is required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all of the Company’s obligations under the Indenture Documents pursuant to a Notes Guarantee on the terms and conditions set forth herein;
WHEREAS, Section 10.01(e) of the Indenture provides, among other things, that the Company and the Trustee may amend or supplement the Indenture Documents without the consent of any Holder to add Guarantees with respect to the Notes; and
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the New Guarantor and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The New Guarantor hereby agrees, jointly and severally with all other Guarantors, to Guarantee the Company’s obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article 11 of the Indenture and to be bound by all other applicable provisions of the Indenture.
3. EFFECTIVENESS. This Supplemental Indenture shall be effective upon execution by the parties hereto.
4. RECITALS. The recitals contained herein shall be taken as the statements of the Company and the New Guarantor and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture.
E-1
5. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
6. COUNTERPART ORIGINALS. The parties may sign any number of copies of this Supplemental Indenture (including by electronic transmission). Each signed copy shall be an original, but all of them together represent the same agreement.
7. EFFECT OF HEADINGS. The section headings in this Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following pages]
E-2
Strictly Confidential
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first written above.
| CURO group Holdings CORP. | ||
| By: | ||
| Name: | ||
| Title: | ||
| [New GUARANTOR] | ||
| By: | ||
| Name: | ||
| Title: | ||
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, As trustee | ||
| By: | ||
| Name: | ||
| Title: | ||
Exhibit 4.4
Execution Version
THIRD SUPPLEMENTAL INDENTURE
This THIRD SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of May 15, 2023, is among CURO Group Holdings Corp., a Delaware corporation (the “Issuer”), the guarantors party hereto (the “Guarantors”) and TMI Trust Company, as trustee and collateral agent (the “Trustee”).
W I T N E S S E T H:
WHEREAS, the Issuer and the Guarantors have heretofore executed and delivered to the Trustee an Indenture, dated as of July 30, 2021, as supplemented by that certain Supplemental Indenture thereto, dated April 28, 2022, and as further supplemented by that certain Supplemental Indenture thereto, dated November 4, 2022, by and among the Issuer, the guarantors party thereto and the Trustee (as may be further amended or supplemented to the date hereof, the “Indenture”), providing for the issuance of 7.500% Senior Secured Notes due 2028 (the “Existing Notes”);
WHEREAS, pursuant to Section 10.02 of the Indenture, the Issuer, the Guarantors and the Trustee may amend or supplement the Indenture with the consent of the Holders of at least a majority in aggregate principal amount or, in certain circumstances, 66 2/3% in aggregate principal amount of the Existing Notes outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Existing Notes) and pursuant to Section 13.08(a) of the Indenture, the Collateral Agent may take direction from the Holders of a majority in aggregate principal amount of the Existing Notes, the Trustee or the Issuer, as applicable, in each case without notice to any other Holder prior to the effectiveness thereof (the “Requisite Consents”);
WHEREAS, the Issuer and the Guarantors desire to amend certain provisions of the Indenture, as set forth in Article 2 of this Supplemental Indenture and to authorize entry into the Intercreditor Agreement (as defined below), as set forth in Section 4.01 of this Supplemental Indenture (the “Proposed Amendments”);
WHEREAS, the Issuer and the Guarantors have entered into an Exchange Agreement, dated as of May 15, 2023 (the “Exchange Agreement”), with certain Holders (the “Exchanging Holders”) holding approximately 68.2% in aggregate principal amount of the Existing Notes outstanding, pursuant to which the Exchanging Holders agreed to consent to the Proposed Amendments to the Indenture;
WHEREAS, the Issuer has received and delivered to the Trustee the Requisite Consents to the Proposed Amendments from the Exchanging Holders, as certified by an Officers’ Certificate delivered to the Trustee simultaneously with the execution and delivery of this Supplemental Indenture;
WHEREAS, this Supplemental Indenture has been duly authorized by all necessary corporate action on the part of the Issuer and the Guarantors;
WHEREAS, all conditions necessary to authorize the execution and delivery of this Supplemental Indenture and to make this Supplemental Indenture valid and binding have been complied with or have been done or performed; and
WHEREAS, pursuant to Section 10.02 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture, and the Issuer and the Guarantors have requested that the Trustee execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Issuer and the Trustee mutually covenant and agree for the equal and ratable benefit of all Holders of the Existing Notes as follows:
Article 1
Amendments to ARTICLE i, Definitions and Incorporation by Reference
Section 1.01. For purposes of this Supplemental Indenture, the terms defined in the recitals shall have the meanings therein specified; any capitalized terms used and not defined herein shall have the same respective meanings as assigned to them in the Indenture; and references to Articles or Sections shall, unless the context indicates otherwise, be references to Articles or Sections of the Indenture.
Section 1.02. Any definitions used exclusively in the provisions of the Indenture or the Existing Notes that are deleted pursuant to the Amendments as set forth under this Supplemental Indenture, and any definitions used exclusively within such definitions, are hereby deleted in their entirety from the Indenture and the Existing Notes, and all textual references in the Indenture and the Existing Notes exclusively relating to paragraphs, Sections, Articles or other terms or provisions of the Indenture that have been otherwise deleted pursuant to this Supplemental Indenture are hereby deleted in their entirety. The words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.
Article 2
AMENDMENTS TO THE INDENTURE AND THE NOTES
Section 2.01. The Indenture and the Existing Notes are hereby amended by:
(a) adding the following definition:
““Third Supplemental Effective Date” means the date of effectiveness of the Third Supplemental Indenture to this Indenture.”
(b) deleting the definition of “Intercreditor Agreement” in its entirety and replacing it with the definition below:
““Intercreditor Agreement” means, collectively or separately, as the context may require, (a) the intercreditor agreement, dated on or about the Third Supplemental Effective Date, among the First Lien Agent (as defined therein), the 1.5 Lien Agent (as defined therein) and the Collateral Agent, (b) the intercreditor agreement, dated on or about the Third Supplemental Effective Date, among the 1.5 Lien Agent (as defined therein) and the Collateral Agent, in each case as amended, restated, supplemented and/or otherwise modified from time to time, and (c) any other intercreditor agreements in connection with the incurrence of any additional Indebtedness permitted under this Indenture, in form and substance approved by the Issuer as evidenced by the Issuer’s execution thereof .”
(c) replacing Section 5.03 (Reports) of the Indenture in its entirety with the following:
“The Company agrees that, at any time it is not subject to Section 13 or Section 15(d) of the Exchange Act, for so long as any Notes remain outstanding, it will furnish to the holders of Notes, any beneficial owner of the Notes, securities analysts and prospective investors, upon their request, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.”
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(d) deleting Sections 5.04 (Compliance Certificate), 5.07 (Restricted Payments), 5.08 (Dividend and Other Payment Restrictions Affecting Subsidiaries), 5.09 (Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock), 5.10 (Asset Sales), 5.11 (Transactions with Affiliates), 5.12 (Liens), 5.14 (Offer to Repurchase Upon Change of Control), 5.15 (Designation of Restricted and Unrestricted Subsidiaries), 5.17 (Additional Subsidiary Guarantees), 5.18 (Business Activities), 5.21 (Mortgages), 5.23 (Limited Condition Transaction) and 5.24 (Covenant Suspension) of the Indenture and all references thereto in the Indenture and the Existing Notes in their entirety, and replacing such Sections of the Indenture with the phrase “[Reserved]”;
(e) deleting the second and third paragraphs in Section 5.13 (Corporate Existence; Maintenance of Property and Insurance”) of the Indenture and removing the phrase “Maintenance of Property and Insurance” from the heading of such Section of the Indenture;
(f) deleting clauses (ii) and (iii) of Section 6.01(a) (Merger, Consolidation or Sale of Assets) and clause (ii) of Section 6.01(b) (Merger, Consolidation or Sale of Assets) of the Indenture and all references thereto in the Indenture and the Existing Notes in their entirety, and replacing such clauses of Section 6.01(a) and (b) of the Indenture with the phrase “[Reserved]”;
(g) deleting clauses (c), (d), (e), (f), (g), (h), (i) and (j) of Section 7.01 (Events of Default) of the Indenture and all references thereto in the Indenture and the Existing Notes in their entirety and replacing such clauses of Section 7.01 of the Indenture with the phrase “[Reserved]”; and
(h) deleting clauses (b), (c), (d), (e) and (f) of Section 9.04 (Conditions to Legal or Covenant Defeasance) of the Indenture and all references thereto in the Indenture and the Existing Notes in their entirety and replacing such clauses of Section 9.04 of the Indenture with the phrase “[Reserved].”
Any and all additional provisions of the Indenture and the Existing Notes are hereby deemed to be amended to reflect the intentions of the Amendments provided for in this Supplemental Indenture.
Article 3
EFFECTIVENESS
Section 3.01. Upon (i) the execution and delivery of this Supplemental Indenture by the Issuer, the Guarantors and the Trustee and (ii) the satisfaction of the conditions set forth in Article VI of the Exchange Agreement (other than the effectiveness of this Supplemental Indenture, to the extent it is a condition thereunder), and the receipt by the Trustee of a written confirmation thereof in an Officer’s Certificate, the Indenture shall be supplemented in accordance herewith, and this Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder holding Existing Notes that have been heretofore or hereafter authenticated and delivered under the Indenture shall be bound thereby.
3
Article 4
AUTHORIZATION OF INTERCREDITOR AGREEMENT
Section 4.01. Subject to the receipt of an Officer’s Certificate and Opinion of Counsel pursuant to the requirements of Section 12.03 of the Indenture, the Collateral Trustee is hereby authorized and directed to enter into and perform its obligations under the Intercreditor Agreement (as defined in Section 2.01 above and including each of (a), (b) and (c) of the definition thereof) in connection with the effectiveness of this Supplemental Indenture and the Exchange Agreement and any other Intercreditor Agreement entered into in connection with the incurrence of any additional Indebtedness permitted under this Indenture hereafter as contemplated by the definition of Intercreditor Agreement.
Article 5
MISCELLANEOUS
Section 5.01. Amendments to the Indenture pursuant to this Supplemental Indenture shall also apply to the Existing Notes, including, without limitation, provisions of the Existing Notes relating to the Amendments as set forth in the Exhibits to the Indenture.
Section 5.02. The Trustee accepts the trusts created by the Indenture, as amended and supplemented by this Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as amended and supplemented by this Supplemental Indenture.
Section 5.03. The terms and conditions of this Supplemental Indenture shall be deemed to be incorporated in and made a part of the terms and conditions of the Indenture for any and all purposes, and all the terms and conditions of both shall be read, taken and construed together as though they constitute one and the same instrument, except that in the case of conflict, the provisions of this Supplemental Indenture will control.
Section 5.04. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Existing Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
Section 5.05. All covenants and agreements in this Supplemental Indenture by the Issuer or the Trustee shall bind their respective successors and assigns, whether so expressed or not.
Section 5.06. In case any provisions in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 5.07. Nothing in this Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors under the Indenture and the Holders of the Existing Notes, any benefit or any legal or equitable right, remedy or claim under the Indenture.
Section 5.08. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together shall represent the same agreement. One signed copy is enough to prove this Supplemental Indenture.
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Section 5.09. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 5.10. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Issuer.
Section 5.11. The Section headings herein are for convenience only and shall not affect the construction thereof.
[Remainder of page intentionally left blank.]
5
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first written above.
| Issuer: | ||
| CURO group Holdings CORP. | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | Chief Executive Officer | |
| GUARANTORS: | ||
| CURO FINANCIAL TECHNOLOGIES CORP. | ||
| CURO INTERMEDIATE HOLDINGS CORP. | ||
| CURO MANAGEMENT LLC | ||
| ENNOBLE FINANCE, LLC | ||
| FIRST HERITAGE CREDIT, LLC | ||
| FIRST HERITAGE CREDIT OF ALABAMA, LLC | ||
| FIRST HERITAGE CREDIT OF LOUISIANA, LLC | ||
| FIRST HERITAGE CREDIT OF MISSISSIPPI, LLC | ||
| FIRST HERITAGE CREDIT OF SOUTH CAROLINA, LLC | ||
| FIRST HERITAGE CREDIT OF TENNESSEE, LLC | ||
| SOUTHERNCO, INC. | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
| ATTAIN FINANCE, LLC | ||
| AD ASTRA RECOVERY SERVICES, INC. | ||
| CURO VENTURES, LLC | ||
| CURO COLLATERAL SUB, LLC | ||
| CURO CREDIT, LLC | ||
| HEIGHTS FINANCING HOLDING CO. | ||
| SOUTHERN FINANCE OF SOUTH CAROLINA, INC. | ||
| SOUTHERN FINANCE OF TENNESSEE, INC. | ||
| COVINGTON CREDIT OF ALABAMA, INC. | ||
| QUICK CREDIT CORPORATION | ||
| COVINGTON CREDIT, INC. | ||
| COVINGTON CREDIT OF GEORGIA, INC. | ||
| COVINGTON CREDIT OF TEXAS, INC. | ||
| HEIGHTS FINANCE CORPORATION | ||
| HEIGHTS FINANCE CORPORATION | ||
| By: | /s/ Gary L. Fulk | |
| Name: | Gary L. Fulk | |
[Signature Page to Third Supplemental Indenture]
| TMI TRUST COMPANY, | ||
| as Trustee | ||
| By: | /s/ Debra A. Schachel | |
| Name: Debra A. Schachel | ||
| Title: Vice President | ||
[Signature Page to Third Supplemental Indenture]
Exhibit 10.1
Execution Version
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (this “Agreement”) is made and entered into as of May 15, 2023 by and among CURO Group Holdings Corp., a Delaware corporation (the “Company”), the other Obligors (as defined herein) and the holders, or investment advisors for the account of holders of the Existing Notes (as defined below), named in Schedule I hereto (each, a “Holder” and, collectively, the “Holders”) of the Company’s 7.500% Senior Secured Notes due 2028 (the “Existing Notes”), which were issued pursuant to the indenture, dated as of July 30, 2021 (the “Existing Indenture”), among the Company, the subsidiary guarantors party thereto (the “Guarantors” and together with the Company, the “Obligors”) and TMI Trust Company, as trustee (in such capacity, the “Existing Notes Trustee”) and collateral agent (in such capacity, the “Existing Notes Collateral Agent”).
RECITALS
WHEREAS, $1,000,000,000 aggregate principal amount of the Existing Notes are issued and outstanding;
WHEREAS, subject to the terms and conditions and other limitations set forth herein, the Company desires to issue to the Holders in exchange for the Exchanged Notes (as defined herein), new Senior 1.5 Lien Secured Notes due 2028 of the Company (the “New Notes”), which will be issued pursuant to an indenture to be dated the date hereof (the “Closing Date”), by and among the Company, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee (in such capacity, the “New Notes Trustee”) and as collateral agent (in such capacity, the “New Notes Collateral Agent”), in the form attached hereto as Exhibit A (the “New Indenture”);
WHEREAS, the New Notes will be secured by a 1.5 priority lien on all of the Collateral (as such term is defined in the Security Documents (as defined herein) listed on Exhibit B, each by and among the grantors thereunder, the Company and the New Notes Collateral Agent) and in accordance with (a) the intercreditor agreement to be dated the Closing Date by and among the Company, the New Notes Collateral Agent, Alter Domus (US) LLC, as the administrative agent and collateral agent under the Credit Facility (as defined below), the Existing Notes Collateral Agent and the Guarantors party thereto, substantially in the form attached hereto as Exhibit C (the “First Priority Intercreditor Agreement”) and (b) the intercreditor agreement to be dated the Closing Date by and among the Company, the New Notes Collateral Agent, the Existing Notes Collateral Agent and the Guarantors party thereto, substantially in the form attached hereto as Exhibit D (the “Junior Intercreditor Agreement”, and together with the First Priority Intercreditor Agreement, the “Intercreditor Agreements”);
WHEREAS, the payment by the Company of all amounts due on or in respect of the New Notes and the performance of the Company under the New Indenture will be initially guaranteed (the “New Guarantees” and, together with the New Notes, the “Securities”) by each of the Guarantors;
WHEREAS, (i) pursuant to Section 10.02 of the Existing Indenture, the Company, the Guarantors and the Existing Notes Trustee may amend or supplement the Existing Indenture with the consent of the Holders (as defined therein) of at least a majority in aggregate principal amount or, in certain circumstances, 66 2/3% in aggregate principal amount of the Existing Notes outstanding and pursuant to Section 13.08(a) of the Existing Indenture, the Existing Notes Collateral Agent may take direction from the Holders of a majority in aggregate principal amount of the Existing Notes, the Existing Notes Trustee or the Company, as applicable, in each case without notice to any other Holder (the “Requisite Consents”); (ii) in connection with the Exchange, the Company, the Guarantors and the Existing Notes Trustee will enter into a third supplemental indenture to the Existing Indenture (the “Supplemental Indenture”), to be dated on or about the date hereof, in order to remove certain covenants and other provisions in the Existing Indenture; and (iii) in connection with the Exchange, the Holders have agreed to consent to the entry into the Supplemental Indenture and the Intercreditor Agreements and the consents of the Holders collectively constitute the Requisite Consents; and
WHEREAS, as a condition to its eligibility to participate in the Exchange, each Holder has agreed to make, or will cause to be made, directly or indirectly, its pro rata portion of the loans under the Credit Facility.
NOW, THEREFORE, subject to the premises and other conditions contained herein, the Obligors and the Holders hereby agree as follows:
Article I:
EXCHANGE AND CONSENT
Section 1.1 Exchange of Exchanged Notes. Subject to the terms and conditions set forth in this Agreement:
(a) at the Closing (as defined herein), each of the Holders shall assign, transfer and deliver to the Company via deposit and withdrawal at custodian (“DWAC”) requests through the book-entry facilities of The Depository Trust Company (“DTC”), in accordance with Section 2.2(b)(i), all of its right, title and interest in and to the Existing Notes held by such Holders (or certain funds and/or accounts for which the Holders act as investment advisor) as of the Closing Date as set forth on Schedule I hereto (the “Exchanged Notes”), free and clear of any Lien, and the Company shall issue and deliver to each Holder, for each $1,000 principal amount of Exchanged Notes, $1,000 principal amount of New Notes validly issued by the Company, free and clear of any Lien; and
(b) any accrued and unpaid interest as of the Closing Date on the Exchanged Notes held by each Holder (or certain funds and/or accounts for which such Holder acts as investment advisor) shall be paid by the Company by wire transfer of immediately available funds to each Holder through the facilities of DTC on the first interest payment date under the New Indenture following the Closing Date.
Notwithstanding the foregoing, (x) the aggregate principal amount of New Notes to be issued to any Holder pursuant to this agreement shall not be in an amount less than $2,000 and shall be rounded down to the nearest integral multiple of $1,000 and (y) no interest shall accrue on the Exchanged Notes after the date on which they are exchanged pursuant to this Agreement, except as provided in Section 2.3 below.
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Section 1.2 Consent to Supplemental Indenture and Intercreditor Agreements. On or prior to the Closing Date, each of the Holders shall deliver to DTC or its nominee, or cause its DTC participant to deliver, through DTC’s “Demand and Dissent” procedures in accordance with Section 2.2(b)(ii), a consent with respect to all Exchanged Notes beneficially owned by such Holder (or certain funds and/or accounts for which such Holder acts as investment advisor), to the entry into the Supplemental Indenture and the Intercreditor Agreements.
Section 1.3 Withholding. The Company acknowledges and agrees that it does not intend to deduct or withhold any amounts in respect of taxes with respect to the New Notes deliverable pursuant to the Exchange. The Company shall be entitled to deduct and withhold from the consideration otherwise payable by or deliverable by the Company to any Holder in connection with the transactions contemplated by this Agreement such amounts as it is required to withhold under the Internal Revenue Code of 1986, as amended (the “Code”), or other applicable law; provided that (i) the Company shall notify each relevant Holder of any intention to withhold or deduct any amounts with respect to the New Notes deliverable to such Holder at least five Business Days prior to the date of the applicable payment or delivery, which notice shall include a statement of the amounts it intends to withhold or deduct in respect of the applicable payment or delivery and the applicable provision of law requiring such withholding or deduction and (ii) to the extent permitted by applicable law, the parties hereto shall cooperate in good faith to reduce or otherwise eliminate any such withholding or deduction. Any amount properly deducted and withheld and paid over to the applicable taxing authority shall be treated for all purposes of this Agreement as having been paid to the Holder in respect of which such deduction and withholding was made.
Article II:
CLOSING
Section 2.1 Closing. Subject to the satisfaction or waiver of the conditions set forth in Article VI below, the closing of the Exchange described in Section 1.1 (the “Closing”) hereof will take place at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, New York, NY at 9:00 a.m., Eastern time, on the Closing Date, unless another date, time or place is agreed to in writing by the parties hereto.
Section 2.2 Closing Deliverables.
(a) Closing Actions and Deliverables of the Obligors. At the Closing, the Obligors shall deliver to the Holders:
(i) customary closing and security documentation (together with the Intercreditor Agreements, and together with any security documentation set forth on Exhibit H hereto, the “Security Documents”), including: (A) executed copies of each security document listed on Exhibit B together with (x) subject to the Intercreditor Agreements, certificates representing the capital stock pledged pursuant to the Security Documents, accompanied by undated stock powers executed in blank, or satisfactory evidence that such certificates and related stock powers were delivered to the First Lien Agent, (y) proper financing statements, duly prepared for filing under the Uniform Commercial Code of all relevant jurisdictions of incorporation or formation, and (z) completed lien searches, dated on or as of a recent date before the Closing, listing all effective financing statements filed in the relevant jurisdictions of each Obligor’s jurisdiction of incorporation or formation that name any Obligor as debtor, together with copies of such financing statements, and not evidencing any Liens not permitted by the Existing Indenture, New Indenture, the Security Documents and the Intercreditor Agreements; (B) a customary written opinion addressed to the Holders and dated as of the Closing Date of Kirkland & Ellis LLP, counsel for the Company and certain of the Obligors and of local counsel in each jurisdiction in which an Obligor is organized and the laws of which are not covered by the opinion of Kirkland & Ellis, (C) a customary secretary’s certificate in respect of each Obligor, dated as of the Closing Date and (D) such other certificates and documents as the Holders may reasonably request, including the Authentication, Delivery and Cancellation Order attached as Exhibit E hereto;
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(ii) the Supplemental Indenture, duly executed and delivered by the Obligors and the Existing Notes Trustee;
(iii) the New Indenture, duly executed and delivered by the Obligors and the New Notes Trustee;
(iv) one or more global certificates representing the New Notes duly issued, executed and delivered by the Company to the New Notes Trustee as custodian of DTC, in the name of Cede & Co., and duly authenticated by the New Notes Trustee; and
(v) by means of DWAC requests through the book-entry facilities of DTC to such Holder’s custodian (or the custodian of certain funds and/or accounts for which such Holder acts as investment advisor), as set forth on Exhibit E hereto, New Notes representing the aggregate principal amount of New Notes issuable to such Holder as determined pursuant to Section 1.1.
(b) Closing Actions and Deliverables of the Holders. Each Holder shall:
(c) at the Closing, effect by means of DWAC requests through the book-entry facilities of DTC, the delivery to the Company (or its trustee or designee), in accordance with the form of order to the Existing Trustee set forth on Exhibit E to this Agreement, of the Exchanged Notes held by such Holder (or the funds and/or accounts for which such Holder acts as investment advisor); and
(d) On or prior to the Closing Date, (a) deliver (or cause its DTC participant to deliver) to DTC, through DTC’s “Demand and Dissent” procedures, a request for DTC’s consents (the “DTC Consents”), in the form set forth on Exhibit F, with respect to all Exchanged Notes beneficially held by such Holder (or certain funds and/or accounts for which such Holder acts as investment advisor), to the entry into the Supplemental Indenture and the Intercreditor Agreements; provided, that, if DTC instructs that such consent to the entry into the Supplemental Indenture be delivered or made through another procedure, each Holder shall deliver such consent through any such other procedure in accordance with DTC’s instructions; and (b) deliver to the Company executed copies of the DTC Consents.
Section 2.3 Consummation of Closing. Subject to the satisfaction or valid waiver of all of the closing conditions set forth in Article VI hereto and the delivery of the deliverables set forth in Section 2.2 hereto, all acts, deliveries and confirmations comprising the Closing, regardless of chronological sequence, will be deemed to occur contemporaneously and simultaneously on the Closing Date, provided the Supplemental Indenture shall take effect immediately prior to the Exchange and entry into the Credit Facility upon the receipt by the Company of the DTC Consents. Each of the parties to this Agreement acknowledges and agrees that to the extent any amount of the Exchanged Notes are not exchanged at the Closing due to any mechanical or administrative difficulties (including with respect to any actions to be taken involving DTC or any DTC participant), then the Obligors and the applicable Holder(s) will use their reasonable best efforts to settle the exchange of such Exchanged Notes as promptly as practicable thereafter; provided that in the event of any such delay in the exchange of Exchanged Notes due to any mechanical or administrative difficulties, no interest shall accrue on the Exchanged Notes after the Closing Date.
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Section 2.4 No Transfer of Exchanged Notes after the Closing; no Further Ownership Rights in Exchanged Notes. Upon their delivery to the Company at the Closing, all Exchanged Notes (or interests therein) exchanged pursuant to this Agreement will cease to be transferable and there shall be no further registration of any transfer of any such Exchanged Notes or interests therein. Upon their delivery to the Company at the Closing, the Exchanged Notes will be deemed cancelled and no longer outstanding, and the Company shall take all actions that may be required to cause the Exchanged Notes to be cancelled by the Existing Notes Trustee.
Section 2.5 No Joint Liability. The obligation of each Holder under Article II hereto is several and not joint, and no Holder shall have any liability to any Person for the performance or non-performance of any obligation by any other Holder hereunder.
Article III:
REPRESENTATIONS AND WARRANTIES OF OBLIGORS
Each of the Obligors represents and warrants, jointly and severally, to each of the Holders that the following statements are true and correct as of the Closing Date (unless otherwise specified):
Section 3.1 Organization and Good Standing. Each of the Obligors (i) has been duly organized or formed, as the case may be, is validly existing and is in good standing under the laws of its jurisdiction of organization, (ii) has all requisite power and authority to carry on its business and to own, lease and operate its properties and assets and (iii) is duly qualified or licensed to do business and is in good standing as a foreign corporation, partnership or other entity, as the case may be, authorized to do business in each jurisdiction in which the nature of such businesses or the ownership or leasing of such properties requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on (A) the properties, business, operations, earnings, assets, liabilities or financial condition of the Company and its subsidiaries, taken as a whole or (B) the ability of the Obligors to perform their respective obligations under the Transaction Documents (as defined below) or consummate any of the transactions contemplated by this Agreement (a “Material Adverse Effect”).
Section 3.2 Due Authorization. Each of the Obligors has all requisite power and authority to execute, deliver and perform its respective obligations under the New Notes, the New Guarantees, the New Indenture, the Security Documents, the Supplemental Indenture and this Agreement (collectively, the “Transaction Documents”). This Agreement has been duly and validly authorized, executed and delivered by each of the Obligors. Assuming the due authorization, execution and delivery of the Holders, this Agreement constitutes a valid and legally binding obligation of each Obligor enforceable against each Obligor in accordance with its terms, subject, as to enforcement, to (i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally and (ii) general principles of equity (whether applied by a court of law or equity) and the discretion of the court before which any proceeding therefor may be brought (collectively, the “Enforceability Exceptions”).
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Section 3.3 No Conflicts. Neither the execution, delivery or performance by any Obligor of the Transaction Documents to which it is a party nor the consummation of any of the transactions contemplated thereby will (with or without notice or the passage of time or otherwise) conflict with, violate, constitute a breach of or a default, require any consent (other than the Requisite Consents in relation to the Existing Indenture to be obtained pursuant to this Agreement) or approval under, result in termination or give to others any right of termination, amendment, acceleration or cancellation or result in the imposition of a Lien on any assets of any of the Company or any of its subsidiaries (except for Liens pursuant to the Security Documents or any Liens in favor of the agent for the lenders under the Credit Agreement and subject to the Intercreditor Agreements) under or pursuant to: (i) the certificate of incorporation, by-laws or other organizational or governing documents (the “Charter Documents”) of the Obligors; (ii) any bond, debenture, note, loan or other evidence of indebtedness, indenture, mortgage, deed of trust, lease or any other contract, agreement, arrangement, understanding or instrument to which any Obligor is a party or by which any of them or their respective properties or assets is bound; or (iii) any U.S. or non-U.S. federal, state or local statute, law (including, without limitation, common law) or ordinance, or any judgment, decree, rule, regulation, order or injunction (collectively, “Applicable Law”) of any U.S. or non-U.S. federal, state, local or other governmental or regulatory authority, governmental or regulatory agency or body, court, arbitrator or self-regulatory organization (each, a “Governmental Authority”), applicable to any of the Obligors or any of their respective properties or assets, except (other than in the case of clause (i) or (iii)) as would not, individually or in the aggregate, have a Material Adverse Effect.
Section 3.4 No Filings. The execution, delivery or performance of the Transaction Documents or the consummation of the transactions contemplated thereby (including, for the avoidance of doubt, the Exchange) do not and will not require any consent, approval, authorization, order, filing or registration of or with, or notice to any Governmental Authority or third party, except (i) such that have been obtained or made, as the case may be, that are in full force and effect, (ii) as may be required under the securities or “Blue Sky” laws of U.S. state or non-U.S. jurisdictions or other non-U.S. laws applicable to the Exchange and (iii) those contemplated by the Security Documents and the Requisite Consent for the Supplemental Indenture to be delivered pursuant to Section 1.2 hereto.
Section 3.5 New Indenture; New Notes; New Guarantees. The New Indenture has been duly and validly authorized by the Company and each of the Guarantors and, as of the Closing, will have been duly executed and delivered by the Company and each of the Guarantors and, assuming the due authorization, execution and delivery of the New Indenture by the New Notes Trustee, will constitute a valid and legally binding obligation of the Company and each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance with its terms, subject to the Enforceability Exceptions. The New Notes have been duly and validly authorized by the Company and, as of the Closing, will have been duly executed by the Company and, when delivered in exchange for Existing Notes pursuant to the Exchange and executed and authenticated in accordance with the New Indenture by the New Notes Trustee, will be duly executed, issued and delivered and will constitute valid and legally binding obligations of the Company, enforceable against the Company, subject to the Enforceability Exceptions, and will be entitled to the benefits of and be in the form contemplated by the New Indenture. The New Guarantees contained in the New Indenture have been duly and validly authorized by each of the Guarantors and, assuming the due authorization, execution and delivery of the New Indenture by the New Notes Trustee, when the New Notes are executed by the Company, authenticated by the New Notes Trustee and delivered in exchange for the Existing Notes pursuant to the Exchange, the New Guarantees will constitute valid and legally binding obligations of the Guarantors, enforceable against the Guarantors, subject to the Enforceability Exceptions, and will be entitled to the benefits of the New Indenture.
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Section 3.6 Supplemental Indenture. The supplemental indenture to the Existing Indenture giving effect to proposed amendments to the Existing Indenture, in the form attached hereto as Exhibit G (the “Supplemental Indenture”), has been duly and validly authorized, executed and delivered by each Obligor and, assuming the due authorization, execution and delivery of the Supplemental Indenture by the Existing Notes Trustee, will constitute a valid and legally binding obligation of each Obligor, enforceable against each Obligor in accordance with its terms, subject to the Enforceability Exceptions.
Section 3.7 Security Documents. Each of the Security Documents has been duly and validly authorized, executed and delivered by the Obligors party thereto and, assuming the due authorization, execution and delivery of each Security Documents by each other non-Obligor party thereto, will constitute a valid and legally binding obligation of each of such Obligors, enforceable against each of such Obligors in accordance with its terms, subject to the Enforceability Exceptions. The provisions of the Security Agreement (as such term is defined in the New Indenture, the “Security Agreement”) create legal and valid Liens on all the Collateral (as defined in the Security Agreement) in favor of the New Notes Collateral Agent, for the benefit of the Notes Secured Parties (as defined in the New Indenture), and so long as such filings and other actions required to be taken hereby, by the New Indenture or by the applicable Security Documents, have been taken, such Liens constitute perfected and continuing Liens on the Collateral (to the extent that a Lien thereon can be perfected by the foregoing actions), securing the Secured Obligations (as defined in the Security Agreement), enforceable against each Obligor party thereto subject to Permitted Liens (as defined in the New Indenture), except as may be limited by the effect of rules of law governing the availability of equitable remedies and subject to the Enforceability Exceptions.
Section 3.8 Arm’s Length. Each Obligor acknowledges and agrees that (i) each of the Holders is acting solely in the capacity of an arm’s length contractual counterparty to such Obligor with respect to the transactions contemplated hereby and not as a financial advisor or a fiduciary to, or an agent of, such Obligor or any of its subsidiaries and (ii) no Holder is advising any Obligor or any of such Obligor’s subsidiaries as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.
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Section 3.9 Investment Company Act. The Obligors have been advised of the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder (collectively, the “Investment Company Act”); as of the date hereof and, after giving effect to the Exchange, each of the Obligors is not and will not be, individually or on a consolidated basis, an “investment company” that is required to be registered under the Investment Company Act; and following the Closing, the Obligors will conduct their businesses in a manner so as not to be required to register under the Investment Company Act.
Section 3.10 General Solicitation. None of the Obligors, nor any of their Affiliates or any Person acting on their behalf, has offered or will offer New Notes in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act of 1933, as amended (the “Securities Act”), or has taken or will take any action that would constitute a distribution of a New Note under the Securities Act, would render the issuance or disposition of a New Note a violation of Section 5 of the Securities Act or any state or other securities law or would require registration pursuant thereto.
Section 3.11 No Integration. None of the Obligors or their Affiliates or any Person acting on its or their behalf, directly or indirectly has offered, sold or solicited any offer to buy and will not, directly or indirectly, offer, sell or solicit any offer to buy, any security of a type or in a manner which would be integrated with the issuance of the New Notes and require the issuance of the New Notes to be registered under the Securities Act.
Section 3.12 No Registration. Assuming the accuracy of the representations and warranties of each Holder contained in Article IV hereof, the offer, issue, and delivery of the New Notes in exchange for Exchanged Notes pursuant to the Exchange are and will be exempt from the registration and prospectus delivery requirements of the Securities Act, and have been registered or qualified (or are exempt from registration and qualification) under the registration, permit, or qualification requirements of all applicable state securities laws; and it is not necessary to qualify the New Indenture under the Trust Indenture Act of 1939, as amended. No securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the New Notes are listed on any national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder (the “Exchange Act”) or quoted in a U.S. automated inter-dealer quotation system.
Section 3.13 No Sanctions. None of the Obligors or any of its subsidiaries or any of its respective directors, officers, or employees is currently the target of any international economic or financial sanctions or trade embargoes administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State), the United Nations Security Council, the European Union, His Majesty’s Treasury or the Government of Canada (“Sanctions”). None of the Obligors or any of its subsidiaries (i) is located, organized or resident in any country or territory subject to country- or territory-wide Sanctions (a “Designated Jurisdiction”) in violation of Sanctions, or (ii) is or has been (within the previous five (5) years) engaged in any transaction with, or for the benefit of, any Person who is now or was then the target of Sanctions or who is located, organized or residing in any Designated Jurisdiction, in each case in violation of Sanctions.
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Section 3.14 No Corruption. None of the Obligors or any of its subsidiaries, nor any of its respective directors, officers or employees, directly or indirectly, has (i) violated within the last five (5) years or is in violation of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, or (ii) within the last five (5) years, made, offered to make, promised to make or authorized the payment or giving of, directly or indirectly, any bribe, rebate, payoff, influence payment, kickback or other improper payment or gift of money or anything of value (including meals or entertainment) to any officer, employee or ceremonial office holder of any government or instrumentality thereof, political party or supra-national organization (such as the United Nations), any political candidate, any royal family member or any other Person who is connected or associated personally with any of the foregoing that is prohibited under any law for the purpose of influencing any act or decision of such payee in his or her official capacity, inducing such payee to do or omit to do any act in violation of his or her lawful duty, securing any improper advantage or inducing such payee to use his or her influence with a government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in each case in this clause (ii) in violation of applicable anticorruption laws.
Section 3.15 SEC Filings. As of the date it was filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) (or, if amended or supplemented, as of the date of the most recent amendment or supplement filed or furnished prior to the date hereof), the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC by the Company on March 10, 2023 did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Section 3.16 Information Provided to Holders. All written information (other than financial projections and other forward-looking information, third-party data and information of a general economic or industry-specific nature) concerning the Obligors and the transactions contemplated hereby prepared by or on behalf of the Obligors or their representatives and made available to any Holder or its representatives in connection with the transactions contemplated hereby (the “Information”), when taken as a whole together with the Company’s SEC filings and other publicly available information, was true and correct in all material respects, as of the date such Information was furnished to such Holder and did not, taken as a whole together with the Company’s SEC filings and other publicly available information, contain any untrue statement of a material fact as of any such date or omit to state a material fact necessary in order to make the statements contained therein, taken as a whole together with the Company’s SEC filings and other publicly available information, not materially misleading in light of the circumstances under which such statements were made (giving effect to all supplements and updates provided thereto); provided that, with respect to any financial projections and other forward-looking information, the Obligors represent and warrant only that such financial projections and other forward-looking information was prepared in good faith based upon assumptions believed to be reasonable at the time, and with respect to any third-party data, the Obligors represent and warrant only that such third-party data was provided in good faith.
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Section 3.17 Solvency. After giving effect to the transactions to be effected at the Closing (including consummation of the Credit Facility), the Obligors, taken as a whole, will be Solvent. As used in this section, the term “Solvent” means, with respect to the Obligors on a consolidated basis, that as of the date of determination, both (i) (a) the sum of the Obligors’ debt (including contingent liabilities) does not exceed the present fair saleable value of the Obligors’ present assets; (b) the Obligors’ capital is not unreasonably small in relation to its business as contemplated on the Closing Date or with respect to any transaction contemplated to be undertaken after the Closing Date; and (c) each of the Obligors has not incurred and does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (ii) each Obligor is “solvent” within the meaning given that term and similar terms under the Bankruptcy Code and applicable Laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, 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 Standard No. 5).
Section 3.18 No Alternative Transaction. No Obligor is a party to any material contract, agreement, commitment, understanding or other obligation (written or oral) with any other person with respect to the Exchange Offer, the purchase, sale, acquisition, repurchase, exchange or other disposition of any Existing Notes other than with respect to this Agreement and the transactions contemplated hereby.
Section 3.19 No Other Representations or Warranties. Except for the representations and warranties contained in this Article III, none of the Obligors nor any Affiliate or representative of any Obligor has made or is making any representation or warranty of any kind or nature whatsoever, oral or written, express or implied with respect to the Obligors, this Agreement, the other Transaction Documents or the transactions contemplated hereby or thereby and the Obligors hereby severally disclaim any reliance on any representation or warranty of any Holder or any Affiliate or representative thereof except for the representations and expressly set forth in Article IV.
Article IV:
REPRESENTATIONS AND WARRANTIES OF HOLDERS
Each Holder represents and warrants, severally but not jointly, to the Obligors, that the following statements are true and correct as of the Closing Date (unless otherwise specified):
Section 4.1 Organization and Good Standing. Such Holder is duly organized, validly existing and in good standing under the laws of its jurisdiction of its incorporation or formation and has all requisite power and authority to enter into this Agreement and perform its obligations hereunder.
Section 4.2 Due Authorization. Such Holder has all requisite power and authority (corporate, limited liability company and other) to execute, deliver and perform its obligations under this Agreement. This Agreement has been duly and validly authorized, executed and delivered by such Holder and, assuming the due authorization, execution and delivery of the Obligors, will constitute a valid and binding obligation of such Holder, enforceable against such Holder in accordance with its terms, except as such enforceability may be limited by the Enforceability Exceptions.
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Section 4.3 No Conflicts. Neither the execution, delivery or performance by such Holder of this Agreement nor the consummation of any of the transactions contemplated thereby will (with or without notice or the passage of time or otherwise) conflict with, violate, constitute a breach of or a default, or require any consent or approval, under or pursuant to: (i) the certificate of incorporation, by-laws or other organizational or governing documents of such Holder; (ii) any bond, debenture, note, loan or other evidence of indebtedness, indenture, mortgage, deed of trust, lease or any other agreement or instrument to which such Holder is a party or by which the Holder is bound; or (iii) any Applicable Law of any Governmental Authority applicable to such Holder, except (other than in the case of clause (i) or (iii)) as would not, individually or in the aggregate, have a material adverse effect on the ability of such Holder to perform its obligations under this Agreement.
Section 4.4 Ownership. Such Holder is the sole beneficial owner and/or the investment advisor, authorized representative or manager for the sole beneficial owner of Exchanged Notes in the principal amount set forth beside its name on Schedule I hereto, having the power to vote and dispose of such Exchanged Notes on behalf of such beneficial owners. There are no outstanding agreements, arrangements or understandings under which such Holder, its nominee or the beneficial owners of the Exchanged Notes for which such Holder acts as investment advisor may be obligated to transfer any of the Exchanged Notes, other than this Agreement. Such Holder beneficially owns (or is acting in its capacity as investment advisor, authorized representative or manager with authority to bind the beneficial owner of) such Exchanged Notes, or beneficially owns the custodial account through which the Exchanged Notes are held, free and clear of any Liens, charges, participations and similar restrictions and any other restrictions that could adversely affect the ability of such Holder to perform its obligations hereunder.
Section 4.5 Transfers. Such Holder (and the beneficial owners of the Exchanged Notes for which such Holder acts as investment advisor, if applicable) has made no prior assignment, sale, participation, grant, conveyance or other transfer of, and has not entered into any other agreement to assign, sell, participate, grant or otherwise transfer (except for Liens in favor of a broker dealer over property in an account with such dealer generally in which a Lien is released upon transfer), in whole or in part, any portion of its right, title or interests in such Holder’s Exchanged Notes, subject to this Agreement, that is inconsistent with the representations and warranties made in Section 4.4 hereof or that would render such Holder (and the beneficial owners of the Exchanged Notes for which such Holder acts as investment advisor, if applicable) otherwise unable to comply with its obligations under this Agreement.
Section 4.6 No Liens. The Exchanged Notes held by such Holder (or the beneficial owners of the Exchanged Notes for which such Holder acts as investment advisor, as the case may be) are not subject to any Lien, except for Liens in favor of a broker dealer over property in an account with such dealer generally in which a Lien is released upon transfer. The execution and delivery of, and the performance by such Holder of its obligations under, this Agreement, will not result in the creation of any Lien upon the Exchanged Notes held by such Holder (or the beneficial owners of the Exchanged Notes for which such Holder acts as investment advisor, as the case may be). Upon the consummation of the Exchange, the Company will acquire the Exchanged Notes exchanged by such Holder (or the beneficial owners of the Exchanged Notes for which such Holder acts as investment advisor, as the case may be) free and clear of any Lien.
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Section 4.7 Investment Experience. Such Holder acknowledges for the benefit of the Obligors that it has such knowledge and experience in financial and business affairs that such Holder is capable of evaluating the merits and risks of an investment in the New Notes. Such Holder (and each beneficial owner of the Exchanged Notes for which such Holder acts as investment advisor) is an “accredited investor,” within the meaning of Rule 501 under the Securities Act and a “qualified institutional buyer” as defined in Rule 144A under the Securities Act. Such Holder (and each beneficial owner of the Exchanged Notes for which such Holder acts as investment advisor) will acquire the New Notes for its own account (or for the account of certain funds and/or accounts for which such Holder acts as investment advisor), for investment, and not with a view to or for sale in connection with any distribution thereof in violation of the registration provisions of the Securities Act or the rules and regulations promulgated thereunder. Such Holder (and each beneficial owner of the Exchanged Notes for which such Holder acts as investment advisor, as applicable) acknowledges for the benefit of the Obligors that it understands that the New Notes are being issued to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Obligors are relying upon the truth and accuracy of, and each Holder’s compliance (and the compliance of each beneficial owner of the Exchanged Notes for which such Holder acts as investment advisor) with, the representations, warranties, agreements, acknowledgments and understandings of such Holder (on its own behalf and on behalf of each beneficial owner of the Exchanged Notes for which such Holder acts as investment advisor) set forth herein in order to determine the availability of such exemptions and the eligibility of such Holder (and each beneficial owner of the Exchanged Notes for which such Holder acts as investment advisor) to acquire the New Notes. Such Holder (and each beneficial owner of the Exchanged Notes for which such Holder acts as investment advisor) acknowledges for the benefit of the Obligors that, in making its decision to invest in the New Notes hereunder, such Holder has relied upon independent investigations made by such Holder and, to the extent believed by such Holder to be appropriate, such Holder’s representatives, including such Holder’s own professional, tax and other advisors. Such Holder (and each beneficial owner of the Exchanged Notes for which such Holder acts as investment advisor) acknowledges for the benefit of the Obligors that the Holder and its representatives have been given the opportunity to ask questions of, and to receive answers from, the Company and its representatives concerning the terms and conditions of the investment in the New Notes. Such Holder (and each beneficial owner of the Exchanged Notes for which such Holder acts as investment advisor) acknowledges for the benefit of the Obligors that it has reviewed, or has had the opportunity to review, all information it deems necessary and appropriate for such Holder to evaluate the financial risks inherent in an investment in the New Notes and has had sufficient time to evaluate the Exchange. Such Holder acknowledges for the benefit of the Obligors that it understands that its investment in the New Notes involves a high degree of risk and that no governmental agency or body having jurisdiction over each Holder or any of its subsidiaries or any of their properties and assets has passed on or made any recommendation or endorsement of the New Notes.
Section 4.8 Securities Law Matters. Each Holder has been advised by the Company and acknowledges that: (i) the offer and sale of the Securities has not been registered under the Securities Act; (ii) the offer and sale of the Securities is intended to be exempt from registration under the Securities Act pursuant to Section 4(a)(2) under the Securities Act; (iii) there is currently no established market for the Securities; and (iv) the Holder is acquiring the Securities for investment purposes, not for the purpose of further distribution. Each Holder is familiar with Rule 144 promulgated by the SEC under the Securities Act and understands the resale limitations imposed thereby and by the Securities Act. Each Holder (and each beneficial owner of the Exchanged Notes for which such Holder acts as investment advisor) will only sell or otherwise transfer the New Notes in accordance with applicable securities laws.
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Section 4.9 No Other Representations or Warranties. Except for the representations and warranties contained in this Article IV, none of the Holders nor any Affiliate or representative of any Holder has made or is making any representation or warranty of any kind or nature whatsoever, oral or written, express or implied with respect to the Holders, this Agreement, the other Transaction Documents or the transactions contemplated hereby or thereby and the Holders hereby severally disclaim any reliance on any representation or warranty of any Obligor or any Affiliate or representative thereof except for the representations and expressly set forth in Article III.
Article V:
CERTAIN COVENANTS
Section 5.1 Consent to Supplemental Indenture. As of the Closing Date, each Holder hereby:
(a) confirms that such Holder has delivered (or caused its DTC participant to deliver) to DTC, through DTC’s “Demand and Dissent” procedures, requests for DTC Consents with respect to all Exchanged Notes beneficially owned by such Holder (or certain funds and/or accounts for which such Holder acts as investment advisor), to the entry into the Supplemental Indenture; and
(b) acknowledges that the DTC Consents with respect to the Exchanged Notes beneficially owned by such Holder delivered to DTC remain valid and in effect and such DTC Consents are hereby ratified and confirmed in all respects giving effect to this Agreement, including with respect to any changes pursuant to this Agreement to such consents and the form of supplemental indenture attached thereto at the time of delivery to DTC.
Section 5.2 Press Release. The Company and each Holder agree that the Company shall issue a press release and a Form 8-K announcing the closing of the transactions contemplated by this Agreement and the other Transaction Documents on the Closing Date and otherwise containing all material non-public information previously disclosed to any Holder and otherwise complying with the Confidentiality Agreements, in form and substance reasonably acceptable to the Company and the Holders.
Section 5.3 Tax Treatment.
(a) The parties currently expect that the exchange of Existing Notes for New Notes pursuant to the Exchange shall not be treated as a “significant modification” under Treasury Regulation Section 1.1001-3(e), and the parties shall file all applicable tax returns in a manner consistent with such expectation, unless otherwise required by applicable law. In the event and to the extent the Exchange constitutes a “significant modification” under Treasury Regulation Section 1.1001-3(e), the Company intends to treat the Exchange as a reorganization pursuant to Section 368 of the Code.
(b) The parties agree to treat the New Notes as debt of the Company for U.S. federal income tax purposes and as a class of interest in the Company solely as a creditor for purposes of Sections 897 and 1445 of the Code and the Treasury Regulations thereunder. The Company shall file all applicable tax returns in a manner consistent with such treatment unless otherwise required by a “determination” within the meaning of Section 1313(a) of the Code.
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Section 5.4 Expenses. The Company shall satisfy the requirements set forth in Section 9.2 hereto on or before the date specified for such requirement.
Section 5.5 Information. So long as the New Notes constitute a “restricted security” within the meaning of Rule 144 under the Securities Act, the Company shall, during any period when the Company is not subject to Section 13 or 15(d) of the Exchange Act, make available, upon request, to any Holder (or transferee of any Holder) in connection with any sale thereof and any prospective purchaser of a New Note from such Holder or such Holder’s transferee the information specified in Rule 144A (d)(4) under the Securities Act.
Section 5.6 Post-Closing Obligations. Each Obligor shall, and shall cause its respective subsidiaries to complete all undertakings set forth on Exhibit H attached hereto in the time periods specified therein or such later time as the comparable undertakings shall be completed with respect to the Credit Facility.
Article VI:
CLOSING CONDITIONS
Section 6.1 The obligation of each party to effect the transactions contemplated by this Agreement and the other Transaction Documents is subject to the satisfaction at the Closing of the following conditions:
(a) no governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, judgment, decree, injunction or other order (whether temporary, preliminary or permanent) that is in effect and precludes consummation of the transactions contemplated hereby and by the other Transaction Documents, and no statute, rule, regulation, order, injunction or decree shall have been enacted, entered, promulgated or enforced by any governmental authority that prohibits or makes illegal this Agreement, the other Transaction Documents or the transactions contemplated hereby or thereby; and
(b) there shall be no pending litigation, action, proceeding, investigation or labor controversy that purports to affect the legality, validity or enforceability of this Agreement or any of the Transaction Documents.
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Section 6.2 The obligations of each Holder to effect the transactions contemplated by this Agreement and the other Transaction Documents is subject to the satisfaction at the Closing of the following conditions:
(a) the applicable Obligors shall have delivered, in accordance with Section 2.2(a), each of the items required to be delivered by them;
(b) all conditions to the closing of the Credit Facility shall be satisfied or waived in accordance with the terms of the Credit Agreement and the Credit Facility shall be consummated substantially concurrently with the Exchange following the effectiveness of the Supplemental Indenture;
(c) the representations and warranties in Article III shall be true and correct as of the Closing Date, except in the case of any representation or warranty which expressly relates to a given date or period, in which case such representation or warranty shall be true and correct as of the respective date or respective period, as the case may be;
(d) the Company shall have paid in full the fees and expenses payable pursuant to Section 9.2;
(e) each Obligor shall have performed or complied with, in all material respects, its covenants and agreements required to be performed or complied with as of Closing under this Agreement, except for the covenants set forth in Section 2.2(a) hereof which each Obligor shall have performed and complied with in all respects; and
Section 6.3 The obligations of the Obligors to effect the transactions contemplated by this Agreement and the other Transaction Documents is subject to the satisfaction at the Closing of the following conditions:
(a) the representations and warranties in Article IV shall be true and correct as of the Closing Date, except in the case of any representation or warranty which expressly relates to a given date or period, in which case such representation or warranty shall be true and correct as of the respective date or respective period, as the case may be;
(b) each of the Holders shall have delivered, in accordance with Section 2.2(b), each of the items required to be delivered by them; and
(c) each Holder shall have performed or complied with, in all material respects, its covenants and agreements required to be performed or complied with as of Closing under this Agreement, except for the covenants set forth in Section 2.2(b) and Section 5.1 hereof, which each Holder shall have performed and complied with in all respects.
Article VII:
SURVIVAL
Section 7.1 Survival. The provisions of Section 5.3, Section 5.4, Section 5.5, Section 5.6, Article VIII and Article IX hereof shall survive the Closing of the transactions contemplated hereby. The representations and warranties of the parties contained in this Agreement shall not survive the Closing.
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Article VIII:
INDEMNIFICATION
Section 8.1 Indemnification. The Obligors agree to indemnify each of the Holders and their affiliates, and their respective equityholders, directors, officers, employees, agents, members, partners, managers, advisors (and any other Persons with a functionally equivalent role notwithstanding a lack of such title or any other title) and each Person, if any, who controls a Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a “Indemnified Party” and, collectively, the “Indemnified Parties”) from and against any losses, claims, damages, expenses or liabilities, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, claims, damages or liabilities of any kind or nature whatsoever (including the reasonable and documented fees and disbursements of counsel and all other reasonable and documented expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them) (collectively, “Losses”), as a result of, relating to, arising out of, or resulting from any Third-Party Claim (as defined herein) asserted against such Indemnified Party arising from or in any way related to, or as a result of any action taken or purported to have been taken by any Person in connection with the consummation of, the transactions contemplated by this Agreement and the other Transaction Documents.
Section 8.2 Indemnification Procedures. Promptly after any Indemnified Party has received notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third Person (other than the Company and its Affiliates or any other Holder or its Affiliates) (each a “Third-Party Claim”), which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party shall give the Company prompt written notice of such Third-Party Claim or the commencement of such action, suit or proceeding, but failure to so notify the Company will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Company is prejudiced by such failure. Such notice shall state the nature and the basis of such Third-Party Claim to the extent then known. The Company shall have the right to defend and settle, at its own expense and by its own counsel who shall be reasonably acceptable to the Indemnified Party, any such matter as long as the Company pursues the same diligently and in good faith. If the Company undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Company and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall include, but shall not be limited to, furnishing the Company with any books, records and other information reasonably requested by the Company and in the Indemnified Party’s possession or control; provided, that such disclosure would not affect any privilege relating to the Indemnified Party or result in a violation of law or any confidentiality obligation; provided, further, that such requesting party shall, if reasonably requested by the Indemnified Party, enter into a reasonably and customary confidentiality agreement relating to such request. Such cooperation of the Indemnified Party shall be at the reasonable cost of the Company, including the reasonable and documented fees and disbursements of counsel to assist the Indemnified Party in connection with such cooperation. After the Company has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Company diligently pursues such defense, the Company shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however, that the Indemnified Party shall be entitled (i) at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (ii) if the Company has failed to assume the defense or employ counsel reasonably acceptable to the Indemnified Party, then the Indemnified Party shall have the right to select its own counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of one such counsel (in addition to any necessary local counsel) and other reasonable expenses related to such participation to be reimbursed by the Company as incurred. Notwithstanding any other provision of this Agreement, (x) the Company shall not settle any Third-Party Claim under which indemnification may be sought hereunder without the consent of the applicable Indemnified Parties unless the settlement thereof imposes no liability or obligation on, and includes a complete, unconditional and irrevocable release from liability of, and does not include any statement or admission of fault, culpability, wrongdoing or malfeasance by, the Indemnified Party and (y) the Company shall not be liable for any settlement entered into by an Indemnified Party without the consent of the Company.
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If the indemnification provided in the preceding paragraph is insufficient, not permitted by applicable law or is judicially determined to be unavailable, then in lieu of indemnifying such Indemnified Person hereunder, the Company shall contribute to the amount paid or payable by such Indemnified Person as a result of any applicable losses and expenses in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and the Indemnified Persons, on the other hand or, if such allocation is not sufficient, permitted by applicable law or available, in such proportion as to reflect not only such relative benefits but also the relative fault of each of the Company and the Indemnified Persons.
Section 8.3 Limitation on Indemnity. Notwithstanding anything to the contrary in this Agreement, none of the Company nor its Affiliates shall be required to indemnify or hold harmless any Indemnified Party to the extent of any Losses that are finally determined by a court of competent jurisdiction to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnified Party, from a willful and material breach of a Holder of its obligations under this Agreement or from a claim solely among the Indemnified Parties. To the extent that the Company or its Affiliates have provided indemnification pursuant to this Article VIII prior to any such determination by a court of competent jurisdiction, each Indemnified Party so determined to have suffered such non-indemnifiable Losses shall promptly refund to the Company, by wire transfer of immediately available funds, any amounts so advanced by the Company or its Affiliates.
Article IX:
MISCELLANEOUS
Section 9.1 Severability. The invalidity or unenforceability of any provision hereof will in no way affect the validity or enforceability of any other provision or the validity and enforceability of this Agreement in any other jurisdiction.
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Section 9.2 Expenses. The Company shall reimburse the Holders for all their reasonable and documented fees and out-of-pocket external expenses incurred in connection with the Exchange (including the documented fees and expenses of Wachtell, Lipton, Rosen & Katz, counsel to the Holders, and Houlihan Lockey, financial advisor to the Holders) promptly and, to the extent such documented fees and out-of-pocket external expenses have been invoiced to the Company at least one Business Day prior to Closing, on the Closing Date.
Section 9.3 Governing Law; Jurisdiction. This Agreement will in all respects be construed in accordance with and governed by the substantive laws of the State of New York, without reference to its choice of law rules. All actions or proceedings arising out of or relating to this Agreement will be heard and determined exclusively in any federal court of the United States of America sitting in the City of New York, Borough of Manhattan; provided, that if such federal court does not have jurisdiction over such action or proceeding, such action or proceeding will be heard and determined exclusively in any state court sitting in the City of New York, Borough of Manhattan. Consistent with the preceding sentence, the parties hereto hereby (i) submit to the exclusive jurisdiction of any federal or state court sitting in City of New York, Borough of Manhattan, for the purpose of any action or proceeding arising out of or relating to this Agreement brought by any party hereto and (ii) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action or proceeding is brought in an inconvenient forum, that the venue of the action or proceeding is improper, or that this Agreement or the transactions contemplated by this Agreement may not be enforced in or by any of the above-named courts.
Section 9.4 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 9.5 Headings. Section headings in this Agreement are included herein for convenience of reference only and will not constitute a part of, or affect the interpretation of, this Agreement.
Section 9.6 Certain Definitions. Capitalized terms in this Agreement shall have the meanings specified below, or as specified elsewhere in this Agreement, for all purposes hereof. The following terms, as used in this Agreement, shall have the meanings as set forth below:
(a) “Affiliate” means, with respect to a specified Person, any other Person, directly or indirectly Controlling or Controlled by or under direct or indirect common Control with such specified Person; provided, that the Obligors, Affiliates of the Obligors, any portfolio company of the Holders or any Affiliates of any portfolio company of the Holders (which entities are not otherwise Affiliates of the Holders and would only be deemed Affiliates pursuant to their relationship with one or more portfolio companies of the Holders) shall not be deemed an Affiliate of any Holder.
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(b) “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.
(c) “Business Day” means any day other than a day on which banks are permitted or required to be closed in New York City.
(d) “Control,” “Controlling” or “Controlled” means, as to a specified Person, the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.
(e) “Credit Facility” means the first lien term loan facility provided under the Credit Agreement (the “Credit Agreement”), to be dated on or about the date hereof, among the Company, as borrower, the Guarantors and Alter Domus (US) LLC, and the lenders and other parties party thereto, as amended and supplemented from time to time.
(f) “Exchange” means the exchange of Existing Notes for New Notes as described in Section 1.1 of this Agreement in accordance with the terms hereof.
(g) “First Lien Agent” means the agent under the Credit Facility.
(h) “Confidentiality Agreements” mean each confidentiality agreement between the Company and certain of the Holders, as amended and supplemented to date.
(i) “Lien” means any mortgage, lien (statutory or other), pledge, security interest, encumbrance, claim, hypothecation, assignment for security, deposit arrangement or preference or other security agreement of any kind or nature whatsoever.
(j) “Officer” means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer or the Secretary of the Company.
(k) “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
Section 9.7 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and either of the parties hereto may execute this Agreement by signing any such counterpart. A facsimile transmission of this Agreement bearing a signature on behalf of a party hereto shall be legal and binding on such party.
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Section 9.8 Assignment; Binding Effect. No Holder shall convey, assign or otherwise transfer any of its rights or obligations under this Agreement without the express written consent of the Company, and none of the Obligors shall convey, assign or otherwise transfer any of its rights and obligations under this Agreement without the express written consent of each Holder. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
Section 9.9 Waiver; Remedies. No delay on the part of any Holder or the Company in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any waiver on the part of any Holder or the Company of any right, power or privilege under this Agreement operate as a waiver of any other right, power or privilege of such party under this Agreement, nor shall any single or partial exercise of any right, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power or privilege under this Agreement.
Section 9.10 Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in addition to any other remedy to which they are entitled at law or in equity.
Section 9.11 Entire Agreement. This Agreement represents the entire agreement between the parties hereto with respect to the transactions contemplated hereby. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the parties hereto with respect to the subject matter hereof.
Section 9.12 Amendment. This Agreement may be modified or amended only by written agreement of each of the parties to this Agreement.
Section 9.13 No Admissions and Reservation of Rights. Nothing herein shall be deemed an admission of any kind. The parties acknowledge and agree that this Agreement and all negotiations thereto shall not be admissible into evidence in any proceeding, other than a proceeding to enforce the terms of this Agreement. Except as expressly provided in this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict any rights, remedies and interests of the parties. Without limiting the foregoing sentence in any way, if the Exchange is not consummated, or if this Agreement is terminated for any reason, each of the parties fully reserves any and all of its rights, remedies and interests.
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Section 9.14 Notice. Any notice or communications hereunder shall be in writing and will be deemed to have been given if delivered in person or by electronic transmission or by registered or certified first-class mail or courier service to the following addresses, or such other addresses as may be furnished hereafter by notice in writing:
if to the Company:
CURO Group Holdings Corp.
3527 North Ridge Road
Wichita, Kansas 67205
Attention: [***]
with copies to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York
Attention: [***].
Facsimile: [***]
Email: [***]
if to the Holders:
As set forth on each Holder’s signature page hereto.
with copies (which shall not constitute notice) to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: [***]
Email: [***]
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers, as of the date first above written.
| ISSUER: | ||
| CURO GROUP HOLDINGS CORP. | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | Chief Executive Officer | |
| GUARANTORS: | ||
| CURO FINANCIAL TECHNOLOGIES CORP. | ||
| CURO INTERMEDIATE HOLDINGS CORP. | ||
| CURO MANAGEMENT LLC | ||
| FIRST HERITAGE CREDIT, LLC | ||
| FIRST HERITAGE CREDIT OF ALABAMA, LLC | ||
| FIRST HERITAGE CREDIT OF LOUISIANA, LLC | ||
| FIRST HERITAGE CREDIT OF MISSISSIPPI, LLC | ||
| FIRST HERITAGE CREDIT OF SOUTH CAROLINA, LLC | ||
| FIRST HERITAGE CREDIT OF TENNESSEE, LLC | ||
| SOUTHERNCO, INC. | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
| ATTAIN FINANCE, LLC | ||
| AD ASTRA RECOVERY SERVICES, INC. | ||
| CURO VENTURES, LLC | ||
| CURO COLLATERAL SUB, LLC | ||
| CURO CREDIT, LLC | ||
| HEIGHTS FINANCING HOLDING CO. | ||
| SOUTHERN FINANCE OF SOUTH CAROLINA, INC. | ||
| SOUTHERN FINANCE OF TENNESSEE, INC. | ||
| COVINGTON CREDIT OF ALABAMA, INC. | ||
| QUICK CREDIT CORPORATION | ||
| COVINGTON CREDIT, INC. | ||
| COVINGTON CREDIT OF GEORGIA, INC. | ||
[Signature Page to Exchange Agreement]
| COVINGTON CREDIT OF TEXAS, INC. | ||
| HEIGHTS FINANCE CORPORATION | ||
| HEIGHTS FINANCE CORPORATION | ||
| By: | /s/ Gary L. Fulk | |
| Name: | Gary L. Fulk | |
| Title: | President | |
[Signature Page to Exchange Agreement]
| NAME OF HOLDER: | ||
| [HOLDER], | ||
| on behalf of funds and/or accounts managed and/or advised by it and/or its affiliates | ||
| By: | /s/ Holder Representative | |
| Name: | ||
| Title: | ||
| Address: | |
| Email: | |
[Signature Page to Exchange Agreement]
Exhibit 10.2
Execution Version
FIRST LIEN CREDIT AGREEMENT
dated as of May 15, 2023
among
CURO GROUP HOLDINGS CORP.
as the Borrower,
THE SUBSIDIARIES OF CURO
GROUP HOLDINGS CORP. LISTED IN THE SIGNATURE PAGES HERETO
as Guarantors,
The Lenders Party Hereto,
and
ALTER
DOMUS (US) LLC,
as Administrative Agent and Collateral Agent
Senior Secured Term Loan Facility
Table of Contents
| Page | ||
| Article I DEFINITIONS, ACCOUNTING TERMS AND RULES OF CONSTRUCTION | 1 | |
| Section 1.01 | Certain Defined Terms | 1 |
| Section 1.02 | Computation of Time Periods | 38 |
| Section 1.03 | Accounting Terms | 38 |
| Section 1.04 | Principles of Construction | 39 |
| Section 1.05 | [Reserved] | 39 |
| Section 1.06 | Divisions | 39 |
| Article II AMOUNTS AND TERMS OF THE LOANS | 39 | |
| Section 2.01 | Commitments | 39 |
| Section 2.02 | Borrowing Mechanics for Loans | 39 |
| Section 2.03 | Payment of Loans | 40 |
| Section 2.04 | [Reserved] | 40 |
| Section 2.05 | [Reserved] | 40 |
| Section 2.06 | Pro Rata Shares; Availability of Funds | 40 |
| Section 2.07 | Use of Proceeds | 41 |
| Section 2.08 | Evidence of Indebtedness; Register; Notes | 41 |
| Section 2.09 | Interest on Loans | 42 |
| Section 2.10 | [Reserved] | 43 |
| Section 2.11 | Default Interest; Late Fees | 43 |
| Section 2.12 | Fees | 43 |
| Section 2.13 | Voluntary Prepayments | 44 |
| Section 2.14 | Mandatory Prepayments | 44 |
| Section 2.15 | General Provisions Regarding Payments | 45 |
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| Section 2.16 | Ratable Sharing | 50 |
| Section 2.17 | [Reserved] | 50 |
| Section 2.18 | Increased Costs; Capital Adequacy | 50 |
| Section 2.19 | Taxes; Withholding, Etc. | 51 |
| Section 2.20 | Obligation to Mitigate | 55 |
| Article III CONDITIONS PRECEDENT | 56 | |
| Section 3.01 | Conditions to Closing Date | 56 |
| Section 3.02 | Conditions to Making of Loans | 58 |
| Article IV REPRESENTATIONS AND WARRANTIES | 59 | |
| Section 4.01 | Loan Parties’ Representations and Warranties | 59 |
| Article V COVENANTS | 63 | |
| Section 5.01 | Financial Statements and Other Reports | 63 |
| Section 5.02 | Lender Calls | 65 |
| Section 5.03 | Information Regarding Collateral | 66 |
| Section 5.04 | Certification of Public Information | 66 |
| Section 5.05 | Existence | 66 |
| Section 5.06 | Payment of Taxes and Claims | 67 |
| Section 5.07 | Maintenance of Properties | 67 |
| Section 5.08 | Insurance | 67 |
| Section 5.09 | Books and Records; Inspections | 67 |
| Section 5.10 | Compliance with Contractual Obligations and Laws | 68 |
| Section 5.11 | Environmental Compliance | 68 |
| Section 5.12 | Subsidiaries | 68 |
| Section 5.13 | Further Assurances | 68 |
| Section 5.14 | Mortgages | 68 |
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| Section 5.15 | Post-Closing Obligations | 69 |
| Section 5.16 | Restricted Payments | 70 |
| Section 5.17 | Dividend and Other Payment Restrictions Affecting Subsidiaries | 72 |
| Section 5.18 | Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock | 75 |
| Section 5.19 | Mergers, Consolidations, Sales of Assets and Acquisitions | 78 |
| Section 5.20 | Transactions with Affiliates | 81 |
| Section 5.21 | Liens | 82 |
| Section 5.22 | [Reserved.] | 82 |
| Section 5.23 | Business Activities | 82 |
| Section 5.24 | Stay, Extension and Usury Laws | 82 |
| Section 5.25 | Loan SPV | 83 |
| Section 5.26 | Financial Covenants | 83 |
| Section 5.27 | Operating Covenants | 83 |
| Article VI EVENTS OF DEFAULT | 85 | |
| Section 6.01 | Events of Default | 85 |
| Article VII GUARANTY | 88 | |
| Section 7.01 | The Guaranty | 88 |
| Section 7.02 | Obligations Unconditional | 89 |
| Section 7.03 | Reinstatement | 89 |
| Section 7.04 | Subordination and Subrogation | 90 |
| Section 7.05 | Remedies | 90 |
| Section 7.06 | Continuing Guarantee | 90 |
| Section 7.07 | General Limitation on Guaranteed Obligations | 90 |
| Section 7.08 | Contribution by Guarantors | 91 |
| Section 7.09 | Additional Guarantors | 91 |
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| Section 7.10 | Keepwell | 92 |
| Article VIII AGENTS | 93 | |
| Section 8.01 | Authorization and Authority | 93 |
| Section 8.02 | Agent Individually | 93 |
| Section 8.03 | Duties of Agents; Exculpatory Provisions | 93 |
| Section 8.04 | Reliance by Agent | 94 |
| Section 8.05 | Delegation of Duties | 95 |
| Section 8.06 | Resignation of Agent | 95 |
| Section 8.07 | Non-Reliance on Agent | 96 |
| Section 8.08 | Collateral and Guarantee Matters | 97 |
| Section 8.09 | Right to Indemnity | 98 |
| Section 8.10 | Administrative Agent May File Proofs of Claim | 99 |
| Article IX MISCELLANEOUS | 99 | |
| Section 9.01 | Amendments, Etc. | 99 |
| Section 9.02 | Notices, Etc. | 100 |
| Section 9.03 | No Waiver; Remedies | 101 |
| Section 9.04 | Costs, Expenses and Indemnification | 102 |
| Section 9.05 | Successors and Assigns; Participations | 103 |
| Section 9.06 | Governing Law; Submission to Jurisdiction | 106 |
| Section 9.07 | Severability | 107 |
| Section 9.08 | Counterparts; Integration; Effectiveness | 107 |
| Section 9.09 | Survival | 108 |
| Section 9.10 | Confidentiality | 108 |
| Section 9.11 | No Fiduciary Relationship | 108 |
| Section 9.12 | Right of Setoff | 109 |
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| Section 9.13 | Payments Set Aside | 109 |
| Section 9.14 | Obligations Several | 109 |
| Section 9.15 | PATRIOT Act | 110 |
| Section 9.16 | Headings Descriptive | 110 |
| Section 9.17 | Entire Agreement | 110 |
| Section 9.18 | First Lien Credit Agreement | 110 |
| Section 9.19 | Borrower Acknowledgements | 110 |
| Section 9.20 | Lender Acknowledgements | 111 |
| Section 9.21 | Acknowledgement and Consent to Bail-In of Affected Financing Institutions | 112 |
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SCHEDULES
| Schedule 1.01(A) | Investments | |
| Schedule 1.01(B) | Liens | |
| Schedule 1.01(C) | Ad Hoc Group | |
| Schedule 2.01 | Commitments | |
| Schedule 4.01(a) | Jurisdiction of Organization | |
| Schedule 4.01(b) | Equity Interests and Ownership | |
| Schedule 5.01(o) | Post-Closing Obligations | |
| Schedule 5.18 | Existing Indebtedness | |
| Schedule 5.20(b)(iii) | Existing Transactions with Affiliates |
EXHIBITS
| Exhibit A-1 | Borrowing Request | |
| Exhibit B | Note | |
| Exhibit C | Compliance Certificate | |
| Exhibit D | Security Agreement | |
| Exhibit E | Counterpart Agreement | |
| Exhibit F | Intercreditor Agreement | |
| Exhibit G | Assignment Agreement | |
| Exhibit H | Administrative Questionnaire | |
| Exhibit I | [Reserved] | |
| Exhibit J-1 | Certificate re Non-Bank Status (Foreign Non-Partnership Lenders) | |
| Exhibit J-2 | Certificate re Non-Bank Status (Foreign Partnership Lenders) | |
| Exhibit J-3 | Certificate re Non-Bank Status (Foreign Non-Partnership Participants) | |
| Exhibit J-4 | Certificate re Non-Bank Status (Foreign Partnership Participants) |
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FIRST LIEN CREDIT AGREEMENT
This FIRST LIEN CREDIT AGREEMENT is entered into as of May 15, 2023 among CURO GROUP HOLDINGS CORP., a Delaware corporation (the “Borrower”), each Guarantor from time to time party hereto, each Lender from time to time party hereto, and Alter Domus (US) LLC, as administrative agent and collateral agent.
WHEREAS, the Borrower desires to arrange a term loan credit facility and the Lenders are willing to provide such facility on the terms and conditions set forth herein. Now, therefore, in consideration of the mutual agreements, provisions and covenants contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:
Article I
DEFINITIONS, ACCOUNTING TERMS AND RULES OF CONSTRUCTION
Section 1.01 Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“1.5 Lien Notes” means the Borrower’s 7.500% Senior 1.5 Lien Secured Notes due 2028 issued under the 1.5 Lien Notes Indenture.
“1.5 Lien Notes Collateral Agent” means U.S. Bank Trust Company, National Association, as Collateral Agent under the 1.5 Lien Notes Indenture, together with its successors in such capacity.
“1.5 Lien Notes Indenture” means that certain Indenture, dated as of the Closing Date, entered into by the Borrower, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent.
“1.5 Lien Notes Indenture Documents” means the “Indenture Documents” as defined in the 1.5 Lien Notes Indenture (as in effect as of the Closing Date).
“Accepting Lender” has the meaning set forth in Section 2.14(c).
“Acquired Debt” means with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person was merged with or into or became a Subsidiary of such specified Person, including Indebtedness Incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person at the time such asset is acquired by such specified Person.
“Activities” has the meaning set forth in Section 8.02.
“Ad Hoc Group” means the ad hoc group of Lenders consisting of (i) each Person set forth on Schedule 1.01(C) attached hereto and (ii) such Persons’ respective Affiliates and Related Funds; provided that any Person described in clause (i) (and its Affiliates and Related Funds) shall be included within the Ad Hoc Group only so long as such Person (together with its Affiliates and Related Funds) hold, collectively, a percentage of the Exposure equal to at least 50% of the percentage of the Exposure held, collectively, by such Person (together with its Affiliates and Related Funds) on the Closing Date.
“Additional Secured Obligations” means (a) all Cash Management Obligations, (b) all Secured Hedging Obligations and (c) all costs and expenses incurred in connection with enforcement and collection of the foregoing, including the reasonable fees, charges and disbursements of counsel, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under the Bankruptcy Code or other applicable Law naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding; provided that Additional Secured Obligations of a Loan Party shall exclude any Excluded Swap Obligations with respect to such Loan Party.
“Adjusted Pre-Tax Income” means, for any Person(s) and any period, income from continuing operations before income taxes of such Person(s) for such period, determined in accordance with GAAP on a consolidated basis, but excluding, to the extent otherwise included therein, (a) one-time costs solely to the extent consisting of (i) transaction costs, restructuring expenses, expenses associated with sold or discontinued businesses and/or product lines and regulatory and legal charges in an aggregate amount during any four Fiscal Quarter period not to exceed the One Time Expense Cap and (ii) goodwill impairments, (b) non-cash gains or losses arising from the disposition of assets (other than loans and receivables) outside of the ordinary course of business, including gains or losses realized on the disposition of the Flexiti line of business, (c) depreciation and amortization (including amortization of goodwill and other intangibles), (d) equity gains or losses on the Katapult investment, (e) fair value changes, (f) income or loss from equity method investment (for the avoidance of doubt, without duplication of any amounts included in clause (d) of this definition), (g) allowance build or release, (h) interest expense in respect of recourse Indebtedness (other than (i) Indebtedness Incurred by a Receivables Entity in a Qualified Receivables Transaction and (ii) any Indebtedness permitted by Section 5.18(b)(xv)) and (i) subject to the Borrower and its Subsidiaries being in compliance with the Facility Documents, income (whether positive or negative) attributable to the Flexiti business line of the Borrower and its Subsidiaries.
“Administrative Agent” means Alter Domus (US) LLC, in its capacity as administrative agent hereunder, or any successor in such capacity.
“Adverse Proceeding” means any action, suit, proceeding, hearing (in each case, whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of the Borrower 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 the Borrower or any of its Subsidiaries, threatened against or affecting the Borrower or any of its Subsidiaries or any property of the Borrower or any of its Subsidiaries.
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“Affected Financial Institution” shall mean (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Affiliate Transactions” has the meaning set forth in Section 5.20(a).
“Agent” means, collectively, the Administrative Agent and the Collateral Agent.
“Agent Fee Letter” shall mean that certain Administrative Agent and Collateral Agent Fee Letter, dated as of the Closing Date, by and among the Borrower and the Agents.
“Aggregate Payments” has the meaning set forth in Section 7.08.
“Agreement” means this First Lien Credit Agreement, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Amounts Due” has the meaning set forth in Section 2.16.
“Asset Sale” means:
(1) the Disposition of any assets;
(2) the issuance or sale by the Borrower or any of its Subsidiaries of Equity Interests of any of the Borrower’s Subsidiaries; and
(3) an Event of Loss.
“Assignment Agreement” means an Assignment and Assumption Agreement substantially in the form of Exhibit G, with such amendments or modifications as may be approved by the Administrative Agent.
“Assignment Effective Date” has the meaning specified in Section 9.05(b).
“Authorized Officer” means, with respect to any Person, any of the chairman of the board, the chief executive officer, the president, the chief financial officer, the treasurer, any assistant treasurer, the secretary, any assistant secretary or any vice president (or authorized signatory holding equivalent function) of such Person (or of such Person’s general partner, member or other similar Person); provided that, when such term is used in reference to any document executed by, or a certification of, an Authorized Officer, upon request of the Administrative Agent, the secretary, an assistant secretary or any other officer or manager (or authorized signatory holding equivalent function) of such Person (or of such Person’s general partner, member or other similar Person) shall have delivered (which delivery may be made on the Closing Date) an incumbency certificate to the Administrative Agent as to the authority of such individual.
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“Backstop Notes” means the 18.00% Senior Secured Notes issued by Loan SPV, as in effect on the Closing Date and with such modifications as the holders thereof and Loan SPV may agree, which modifications are immaterial or which reflect corresponding modifications to the Loans in accordance with the terms hereof.
“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” shall mean (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time that is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as heretofore and hereafter amended, and certified as 11 U.S.C. Section 101 et seq.
“Bay Coast Revolving Credit Facility” means the non-recourse facility established by that certain Revolving Loan Agreement, dated as of September 1, 2017, among CURO Financial Technologies Corp., CURO Intermediate Holdings Corp., as borrowers, the guarantors party thereto, the lenders party thereto and Bay Coast Bank, as administrative agent, collateral agent and issuing bank, as modified by the First Amendment, dated as of February 26, 2018, the Second Amendment, dated as of August 27, 2018, the Third Amendment, dated as of November 9, 2018, the Fourth Amendment, dated as of June 30, 2019, the Fifth Amendment, dated as of April 30, 2020, the Sixth Amendment, dated as of January 29, 2021, the Seventh Amendment, dated as of June 30, 2021, the Eighth Amendment, dated as of August 10, 2021, the Ninth Amendment, dated as of June 30, 2022, the Tenth Amendment, dated as of July 29, 2022 and the Eleventh Amendment, dated as of August 31, 2022, and as further amended, amended and restated, supplemented, replaced or otherwise modified from time to time.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
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“Benefit Plan” shall mean any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in, and subject to, Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan.”
“Board” means the Board of Governors of the Federal Reserve System (or any successor).
“Board of Directors” means:
(a) 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;
(b) with respect to a partnership, the board of directors or other governing body of the general partner of the partnership;
(c) with respect to a limited liability company, the board of directors, managers or other governing body, and in the absence of the same, the managing member or members or any controlling committee of managing members thereof; and
(d) with respect to any other Person, the board or committee of such Person or other individual or entity serving a similar function.
“Borrower” has the meaning specified in the preamble hereto.
“Borrowing Request” means a written notice substantially in the form of Exhibit A-1.
“Business Day” means (a) a day which is not a Saturday or Sunday or a legal holiday and on which banks are not required or permitted by Law or other governmental action to close in New York City, New York and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on a Loan or a notice by the Borrower with respect to any such borrowing, payment or prepayment, which is also a U.S. Government Securities Business Day.
“Business Plan” means an expenses savings plan of the Borrower and its Subsidiaries for a period of at least twenty-four (24) months following the Closing Date, which business plan shall include, inter alia, detail as to proposed reductions in selling, general and administrative expenses and operating expenses of the Borrower and its Subsidiaries.
“CAD”, “CAD$” or “Canadian Dollars” means the lawful currency of Canada.
“Canadian Direct Lending Subsidiary” has the meaning specified in clause (1) of the definition of “Permitted Investments”.
“Canadian Recourse Facility” has the meaning specified in Section 5.18(b)(xv).
“Canadian Recourse Facility Borrower” has the meaning specified in Section 5.18(b)(xv).
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“Canadian Subsidiary” means any Subsidiary incorporated or organized in Canada or any province or territory thereof.
“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under a lease of (or other Indebtedness arrangements conveying the right to use) real or personal property which are required to be classified and accounted for as a capital lease or capitalized on a balance sheet of such Person determined in accordance with GAAP and the amount of such obligations shall be the capitalized amount thereof in accordance with GAAP and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease or other arrangement prior to the first date upon which such lease or other arrangement may be terminated by the lessee without payment of a penalty.
“Capital Stock” of any Person means any and all shares, interests, participations or other equivalents (however designated) of such Person’s capital stock, including preferred stock, whether now outstanding or issued after the Closing Date.
“Cash Equivalents” means:
(1) marketable direct obligations issued by, or unconditionally Guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition;
(2) certificates of deposit, time deposits, eurodollar time deposits, overnight bank deposits or banker’s acceptances having maturities of one year or less from the date of acquisition issued by any lender to the Borrower or any of its Subsidiaries or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $1,000,000,000;
(3) commercial paper of an issuer rated at least A-1 by Standard & Poor’s Ratings Group (“S&P”) or P-1 by Moody’s Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within one year from the date of acquisition;
(4) repurchase obligations of any financial institution satisfying the requirements of clause (2) of this definition, having a term of not more than 30 days, with respect to securities issued or fully Guaranteed or insured by the United States government;
(5) securities with maturities of one year or less from the date of acquisition issued or fully Guaranteed by any state of the United States, by any political subdivision or taxing authority of any such state or by any foreign government, the securities of which state, political subdivision, taxing authority or foreign government (as the case may be) have one of the two highest rating obtainable from either S&P or Moody’s;
(6) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any financial institution satisfying the requirements of clause (2) of this definition;
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(7) money market, mutual or similar funds that invest at least 95% of their assets in assets satisfying the requirements of clauses (1) through (6) of this definition;
(8) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $1,000,000,000; and
(9) with respect to Foreign Subsidiaries only, any Investments outside of the United States that are functional foreign equivalents in all material respects to the Cash Equivalents described in clauses (1) through (5) above.
“Cash Management Obligations” means all obligations of any Loan Party in respect of overdrafts and liabilities that arise from treasury, depositary or cash management services, including in connection with any automated clearing house transfers of funds, or any similar transactions, in each case pursuant to an agreement with any person that, at the time it enters into such agreement (or on the Closing Date), is an Agent, a Lender or an Affiliate of an Agent or a Lender; provided that obligations under such agreement are not designated by notice delivered by the Borrower to the Administrative Agent to be excluded from being Cash Management Obligations.
“Certificate re Non-Bank Status” means a certificate substantially in the form of Exhibit J-1, J-2, J-3 or J-4, as applicable.
“CFC” means a Subsidiary of the Borrower that is a controlled foreign corporation within the meaning of Section 957(a) of the Code.
“CFPB” means the Consumer Financial Protection Bureau.
“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Change of Control” means the occurrence of any of the following:
(1) the direct or indirect Disposition, in one or a series of related transactions, of all or substantially all of the assets of the Borrower and its Subsidiaries, taken as a whole, to any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) other than the Borrower or any of its Subsidiaries;
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(2) the adoption of a plan relating to the liquidation or dissolution of the Borrower; or
(3) the consummation of any transaction (including any merger or consolidation) the result of which is that any “person” or “group” (as defined above) other than the Permitted Holders, becomes the “beneficial owner” (as such term is defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (3) such “person” or “group” shall be deemed to have “beneficial ownership” of all shares that such “person” or “group” has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the Voting Stock of the Borrower.
“Closing Date” means the date on which the conditions specified in Section 3.01 are satisfied (or waived in accordance with the terms hereof), which date is acknowledged to be May 15, 2023.
“Closing Date Projections” has the meaning set forth in Section 3.01(m).
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Collateral” means, collectively, all of the property (including Equity Interests) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.
“Collateral Agent” means Alter Domus (US) LLC, in its capacity as collateral agent hereunder, or any successor in such capacity.
“Collateral Documents” means the Security Agreement, the Pledge Agreement and all other instruments, documents and agreements delivered by any Loan Party pursuant to this Agreement or any of the other Facility Documents in order to grant to the Collateral Agent, for the benefit of the Secured Parties, a Lien on any assets or property of that Loan Party as security for the Obligations, including UCC financing statements and amendments thereto and filings with the U.S. Patent and Trademark Office and the U.S. Copyright Office.
“Commitment” means the commitment of a Lender to make or otherwise fund a Loan hereunder on the Closing Date, and “Commitments” means such commitments of all Lenders in the aggregate. The amount of each Lender’s Commitment, if any, is set forth opposite such Lender’s name on Schedule 2.01, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Commitments as of the Closing Date is $150,000,000.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.) and any successor thereto.
“Compliance Certificate” means a Compliance Certificate substantially in the form of Exhibit C.
“Confidential Information” means all information received from the Borrower or any Affiliate of the Borrower on any of their respective businesses, other than any such information that is available to an Agent or a Lender on a non-confidential basis prior to disclosure by the Borrower or any of its Affiliates, provided that, in the case of information received from the Borrower or any of its Affiliates after the Closing Date, such information is clearly identified as confidential at the time of delivery. A Person required to maintain the confidentiality of Confidential Information as provided in this Agreement is a “Confidential Person.” Any Confidential Person shall be considered to have complied with its obligation to do so if such Confidential Person has exercised the same degree of care to maintain the confidentiality of such Confidential Information as such Confidential Person would accord to its own confidential information.
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“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Contractual Obligation” means, as applied to any Person, any provision of any security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.
“Contributing Guarantors” has the meaning set forth in Section 7.08.
“Counterpart Agreement” means a Counterpart Agreement substantially in the form of Exhibit E delivered by a Loan Party pursuant to Section 7.09.
“CSO Obligations” means obligations to purchase, or other Guarantees of, consumer loans the making of which were facilitated by the Borrower or a Subsidiary of the Borrower acting as a credit services organization or other similar service provider.
“Currency Hedging Obligations” means the obligations of any Person pursuant to an arrangement designed to protect such Person against fluctuations in currency exchange rates.
“Declined Prepayment Amount” has the meaning set forth in Section 2.14(c).
“Declining Lender” has the meaning set forth in Section 2.14(c).
“Default” means any event which is, or after notice or the passage of time or both would become, an Event of Default.
“Defaulting Lender” means any Lender that has (a) failed to fund any portion of its Commitment within one Business Day of the date required to be funded by it hereunder, unless the subject of a good faith dispute, (b) notified the Borrower, the Administrative Agent or any Lender in writing, or has otherwise indicated through a public statement, that it does not intend to comply with its funding obligations generally under agreements in which it commits to extend credit, (c) failed, within three (3) Business Days after receipt of a written request from the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Commitments, (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three (3) Business Days of the date when due, unless the subject of a good faith dispute, (e) become subject to a Bail-In Action or (f) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, custodian, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, custodian, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided that (i) the Administrative Agent and the Borrower may declare (A) by joint notice to the Lenders that a Defaulting Lender is no longer a “Defaulting Lender” or (B) that a Lender is not a Defaulting Lender if in the case of both clauses (A) and (B) the Administrative Agent and the Borrower each determines, in its sole respective discretion, that (x) the circumstances that resulted in such Lender becoming a “Defaulting Lender” no longer apply or (y) it is satisfied that such Lender will continue to perform its funding obligations hereunder and (ii) a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of Voting Stock or any other equity interest in such Lender or a parent company thereof by a Governmental Authority or an instrumentality thereof.
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“Default Rate” has the meaning set forth in Section 2.11.
“Dispose” or “Disposed of” means to convey, sell, lease, sell and leaseback, assign, farm-out, transfer or otherwise dispose of any property, business or asset. The term “Disposition” shall have a correlative meaning to the foregoing.
“Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder) or upon the happening of any event:
(1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock convertible or exchangeable solely at the option of the Borrower or a Subsidiary of the Borrower; provided that any such conversion or exchange will be deemed an Incurrence of Indebtedness or Disqualified Stock, as applicable);
(3) is redeemable at the option of the holder thereof, in whole or in part; or
(4) provides for scheduled mandatory payments of dividends in cash,
in the case of each of clauses (1), (2), (3) and (4), on or prior to the ninety-first day after the Scheduled Maturity Date; provided that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring on or prior to the ninety-first day after the Scheduled Maturity Date will not constitute Disqualified Stock if the terms of such Capital Stock provide that such Person may not repurchase or redeem any such Capital Stock pursuant to such provisions prior to repayment in full of the Loans and all other Obligations that are accrued and payable in connection therewith.
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“Dollars”, “USD” and “$” mean the lawful currency of the United States of America.
“Domestic Subsidiary” means any Subsidiary other than a Foreign Subsidiary.
“EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clause (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein, Norway and the United Kingdom.
“EEA Resolution Authority” shall mean any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Assignee” means any Person other than a natural Person that is (i) a Lender or an Affiliate or Related Fund of any Lender, or (ii) a commercial bank, insurance company, investment or mutual fund or other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act) and which extends credit or buys loans in the ordinary course of business; provided that in no event shall (A) any Defaulting Lender, (B) any Loan Party or any Affiliate thereof or (C) any direct competitor of any Loan Party or any subsidiary of a Loan Party which, in the case of this clause (C), has been previously identified by the Borrower in writing to the Administrative Agent be an Eligible Assignee; provided further that nothing in this definition shall prevent Loan SPV from owning the Loans issued to it on the Closing Date.
“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, any Loan Party or any of its ERISA Affiliates, or with respect to which any Loan Party or any of its ERISA Affiliates has or could reasonably be expected to have liability, contingent or otherwise under ERISA.
“Environmental Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order, decree or directive (conditional or otherwise) by any Governmental Authority or any other Person, arising (i) pursuant to any Environmental Law, (ii) in connection with any actual or alleged violation of, or liability pursuant to, any Environmental Law, including any Governmental Authorizations issued pursuant to Environmental Law, (iii) in connection with any Hazardous Material, including the presence or Release of, or exposure to, any Hazardous Materials and any abatement, removal, remedial, corrective or other response action related to Hazardous Materials or (iv) in connection with any actual or alleged damage, injury, threat or harm to natural resources, the environment or, as such relate to exposure to Hazardous Materials, health or safety.
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“Environmental Laws” means any and all current or future foreign or domestic, federal, state or local Laws (including any common law), statutes, ordinances, orders, rules, regulations, judgments or any other requirements of Governmental Authorities relating to or imposing liability or standards of conduct with respect to (i) the protection of the environment, (ii) the generation, use, storage, transportation or disposal of, or exposure to, Hazardous Materials; or (iii) occupational safety and health as such relate to exposure to Hazardous Materials, industrial hygiene, the protection of human health or welfare as such relate to exposure to Hazardous Materials, in any manner applicable to the Borrower or any of its Subsidiaries or any of their facilities.
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, the regulations promulgated thereunder and any successor thereto.
“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 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 Code of which that Person is a member; and (iii) with respect to any provisions relating to Section 412 of the Code, any member of an affiliated service group within the meaning of Section 414(m) or (o) of the 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.
“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 30 day notice to the PBGC has been waived by regulation); (ii) a determination that any Pension Plan is, or is expected to be, in “at risk” status (as defined in Section 430 of the Code or Section 303 of ERISA); (iii) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) a determination that any Multiemployer Plan is, or is expected to be in “critical” or “endangered” status under Section 432 of the Code or Section 305 of ERISA; (v) the withdrawal by any Loan Party or any of its ERISA Affiliates from any Pension Plan with two or more contributing sponsors in which such Loan Party or its ERISA Affiliates was a substantial employer as defined in Section 4001(a)(2) of ERISA or the termination of any such Pension Plan resulting in liability to any Loan Party, or any of its ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (vi) the institution by the PBGC of proceedings to terminate any Pension Plan or the occurrence of any event or condition which would reasonably be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer any Pension Plan; (vii) the imposition of liability on any Loan Party (including on account of any of its ERISA Affiliates) pursuant to Section 4062(e) ERISA; (viii) the withdrawal of a Loan Party or any of its ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, (ix) the receipt by a Loan Party or any of its ERISA Affiliates of notice from a Multiemployer Plan that it is in insolvency pursuant to Section 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA, (x) failure by any Loan Party or any of its ERISA Affiliates thereof to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Code or Section 302(c) of ERISA) or the failure to make by its due date a required installment under Section 430 of the Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan after any applicable cure periods; or (xi) the imposition of any lien on any of the rights, properties or assets of any Loan Party, in either case pursuant to Section 303(k) or Section 4068 of ERISA, or Section 430(k) of the Code. For purposes of clause (viii) of the preceding sentence, no complete or partial withdrawal from a Multiemployer Plan shall be deemed to have occurred unless and until the Borrower or any of its ERISA Affiliates receives written notice thereof from such Multiemployer Plan.
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“Erroneous Payment” has the meaning set forth in Section 2.15(i)(A).
“Erroneous Payment Return Deficiency” has the meaning set forth in Section 2.15(i)(D).
“Erroneous Payment Impacted Class” has the meaning set forth in Section 2.15(i)(D).
“Erroneous Payment Deficiency Assignment” has the meaning set forth in Section 2.15(i)(D).
“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Event of Loss” means, with respect to any property or asset, any (i) loss or destruction of, or damage to, such property or asset or (ii) any condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property or asset, or confiscation or requisition of the use of such property or asset.
“Events of Default” has the meaning specified in Section 6.01.
“Exchange” means the exchange of Existing Notes by certain holders thereof for 1.5 Lien Notes to occur on the Closing Date.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, any successor statute thereto, and any regulations promulgated thereunder.
“Excluded Assets” means:
(1) the voting Capital Stock of any CFC (other than a Canadian Subsidiary) in excess of 65% of all of the outstanding voting Capital Stock of such CFC;
(2) motor vehicles covered by certificates of title or ownership to the extent that a security interest cannot be perfected solely by filing a UCC-1 financing statement (or similar instrument);
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(3) (x) real property owned by the Borrower or any of the Guarantors in fee simple that has a Fair Market Value of less than $2.5 million and (y) leasehold interests in real property with respect to which the Borrower or any Guarantor is a tenant or subtenant;
(4) rights under any contracts that contain a valid and enforceable prohibition on collateral assignment of such rights (other than to the extent that any such prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other applicable law or principles of equity), but only for so long as such prohibition exists and is effective and valid;
(5) Equity Interests in a Receivables Entity only to the extent that terms of the related Qualified Receivables Facility prohibit the pledge thereof to secure the Obligations;
(6) (i) deposit accounts of the Borrower or any Guarantor and securities accounts held by First Heritage Credit, LLC to the extent (a) exclusively used for payroll, payroll taxes, other trust fund taxes and other employee wage and benefit payments or (b) the terms of a Qualified Receivables Facility (which terms are permitted pursuant to Section 5.17(b)(xiii)) prohibit the pledge thereof to secure the Obligations, and (ii) each deposit or security account expressly excluded as Collateral pursuant to the Security Agreement;
(7) property or assets owned by any Subsidiary of the Borrower that is not a Guarantor;
(8) any application for registration of a trademark filed with the United States Patent and Trademark Office on an intent-to-use basis until such time (if any) as a statement of use or amendment to allege use is accepted by such office, at which time such trademark shall automatically become part of the Collateral and subject to the security interest of the Indenture Documents;
(9) [reserved;]
(10) Equity Interests in any joint venture only to the extent and for so long as a pledge thereof to secure the Obligations is not permitted by the terms of the joint venture or other agreement under which such joint venture is organized; and
(11) any segregated deposits that constitute Permitted Liens under clauses (5), (6), (9), (11), (12) and (19) of the definition of Permitted Liens, in each case, that are prohibited from being subject to other Liens;
provided, proceeds and products from any and all of the foregoing excluded assets described in clauses (1) through (11) shall not constitute Excluded Assets unless such proceeds or products would otherwise constitute Excluded Assets if not proceeds or products of the foregoing.
“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a Lien to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act (or the application or official interpretation thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 7.10 and any other “keepwell”, support or other agreement for the benefit of such Guarantor and any and all Guarantees of such Guarantor’s Swap Obligations by other Loan Parties) at the time the Guaranty of such Guarantor, or grant by such Guarantor of a Lien, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a Swap Master Agreement governing more than one Swap Agreement, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swap Agreements for which such Guaranty or Lien is or becomes excluded in accordance with the first sentence of this definition.
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“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by overall net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (1) that are imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof), or (2) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.19(b), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.19(c) and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Existing First Heritage SPV Facility” means the non-recourse facility established by that certain Credit Agreement, dated as of July 13, 2022, among First Heritage Financing I, LLC, as borrower, First Heritage Credit, LLC, as servicer, the subservicers party thereto, the lenders from time to time party thereto, the agents for the lender groups from time to time party thereto, Credit Suisse AG, New York Branch, as administrative agent and structuring and syndication agent, ComputerShare Trust Company, National Association, as paying agent, image file custodian, backup servicer and collateral agent, and Wilmington Trust, National Association, as borrower loan trustee, and as amended, amended and restated, supplemented, replaced or otherwise modified from time to time.
“Existing Flexiti Securitization Notes” means the non-recourse notes issued pursuant to that certain Trust Indenture, dated as of December 9, 2021, by and between Flexiti Securitization Limited Partnership, Flexiti Securitization General Partner Inc., as issuer, and Computershare Trust Company, as indenture trustee, as supplemented by that certain Series 2021-1 Supplemental Indenture, dated as of December 9, 2021, and that certain Amended and Restated Series 2021-1 Supplemental Indenture, dated as of June 29, 2022, and as further amended, amended and restated, supplemented or otherwise modified from time to time.
“Existing Flexiti SPV Facility” means the non-recourse facility established by that certain Fifth Amended and Restated Credit Agreement, dated as of September 29, 2022, among Flexiti Financing SPE Corp., as borrower, Flexiti Financial Inc., as seller and servicer, the lenders from time to time party thereto, Credit Suisse AG, New York Branch, as facility agent, lead arranger, syndication agent and documentation agent, Midtown Madison Management LLC, as class B agent, and TSX Trust Company, as collateral agent and verification agent, and as amended, amended and restated, supplemented, replaced or otherwise modified from time to time.
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“Existing Heights SPV Facility” means the non-recourse facility established by that certain Credit Agreement, dated as of July 15, 2022, among Heights Financing I, LLC, as borrower, SouthernCo, Inc., as servicer, the subservicers party thereto, the lenders from time to time party thereto, the agents for the lender groups from time to time party thereto, Credit Suisse AG, New York Branch, as administrative agent and structuring and syndication agent, ComputerShare Trust Company, National Association, as paying agent, image file custodian, backup servicer and collateral agent, and Wilmington Trust, National Association, as borrower loan trustee, and as amended, amended and restated, supplemented, replaced or otherwise modified from time to time.
“Existing Indebtedness” means any Indebtedness of the Borrower or any of its Subsidiaries outstanding on the Closing Date, other than the 1.5 Lien Notes, the Existing Notes, Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility, until such Indebtedness is repaid.
“Existing Notes” means the Borrower’s 7.500% Senior Secured Notes due 2028 issued under the Existing Notes Indenture.
“Existing Notes Collateral Agent” means TMI Trust Company, as Collateral Agent under the Existing Notes Indenture, together with its successors in such capacity.
“Existing Notes Indenture” means that certain Indenture, dated as of July 30, 2021, entered into by the Borrower, the guarantors party thereto and the Existing Notes Collateral Agent in connection with the issuance of the Existing Notes, as amended from time to time.
“Existing Notes Indenture Documents” means the “Indenture Documents” as defined in the Existing Notes Indenture (as in effect as of the Closing Date).
“Existing Notes Supplemental Indenture” means that certain Supplemental Indenture to the Existing Notes Indenture, dated as of the Closing Date, in form and substance acceptable to the Lenders.
“Existing Revolving Canada SPV Facility” means the non-recourse facility established by that certain Second Amended and Restated Asset-Backed Revolving Credit Agreement, dated as of November 12, 2021, among Curo Canada Receivables Limited Partnership, as borrower, by its general partner, Curo Canada Receivables GP Inc., the lenders party thereto and Waterfall Asset Management, LLC, as administrative agent, and as amended, amended and restated, supplemented, replaced or otherwise modified from time to time.
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“Exposure” means, with respect to any Lender as of any date of determination, (a) prior to the termination of the Commitments, that Lender’s Commitment; and (b) after the termination of the Commitments, the sum of the aggregate outstanding principal amount of the Loans of that Lender.
“Facility Documents” means, collectively, this Agreement, the Notes, if any, the Collateral Documents, the Intercreditor Agreement, any related fee letter, including the Agent Fee Letter, and each other agreement or instrument executed or delivered in connection herewith or therewith (including each other agreement, instrument or document that creates a Lien in favor of the Collateral Agent for the benefit of the Secured Parties to secure the Obligations) that is designated by the parties thereto as a “Facility Document.”
“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the Borrower, as applicable; provided, however, that with respect to any such value less than $2.5 million, only the good faith determination of the Borrower’s senior management shall be required.
“Fair Share” has the meaning set forth in Section 7.08.
“Fair Share Contribution Amount” has the meaning set forth in Section 7.08.
“FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code as of the date of this Agreement (or any amended or successor version described above) and any fiscal or regulatory legislation, rules, or practices adopted pursuant to any intergovernmental agreement among Governmental Authorities and implementing such Sections of the Code.
“Federal Funds Rate” means for any day, the rate per annum (expressed, as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1.00%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to the Administrative Agent, in its capacity as a Lender, on such day on such transactions as determined by the Administrative Agent.
“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 Borrower that such financial statements fairly present, in all material respects, the financial condition of the Borrower 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.
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“Fiscal Quarter” means each fiscal quarter of the Borrower and its Subsidiaries.
“Fiscal Year” means each fiscal year of the Borrower and its Subsidiaries.
“Foreign Lender” means a Lender that is not a U.S. Person.
“Foreign Subsidiary” means any Subsidiary incorporated or organized in a jurisdiction other than the United States or any state thereof or the District of Columbia.
“Founders” means each of (i) Doug Rippel, (ii) Chad Faulkner, (iii) Mike McKnight, and (iv) any (a) spouse or lineal descendent (whether natural or adopted) of any Person listed in clauses (i) through (v) or (b) trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or persons beneficially holding an 80% or more controlling interest of which consist of such Person and/or any of the Persons referred to in the immediately preceding clause (a).
“Funding Guarantors” has the meaning set forth in Section 7.08.
“GAAP” means generally accepted accounting principles in the United States as in effect on the Closing Date, consistently applied.
“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Governmental Authorization” means any permit, license, authorization, certification, registration, approval, plan, directive, consent order or consent decree of or from any Governmental Authority.
“Guarantee” means, with respect to any Person, any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or
(2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.
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The term “Guarantee” used as a verb has a corresponding meaning.
“Guaranteed Indebtedness” of any Person means, without duplication, all Indebtedness of any other Person referred to in the definition of Indebtedness and all dividends of other Persons, in either case, the payment of which such Person has Guaranteed or for which such Person is directly or indirectly responsible or liable as obligor, guarantor or otherwise.
“Guaranteed Obligations” has the meaning specified in Section 7.01.
“Guarantor” means each of the Guarantors listed in the signature pages hereto and each other Subsidiary of the Borrower that hereafter becomes a Guarantor in accordance with Section 7.09; provided that the Borrower shall also be a Guarantor with respect to Obligations owing by any other Loan Party (determined before giving effect to Sections 7.01 and 7.10) under the Guaranty.
“Guaranty” means, collectively, the Guarantee made by the Guarantors pursuant to Article VII in favor of the Secured Parties, together with each other guaranty delivered pursuant to Section 7.09.
“Hazardous Materials” means any pollutant, contaminant, chemical, waste, material or substance, exposure to which or Release of which is prohibited, limited or regulated by any Governmental Authority, including petroleum, petroleum products, asbestos, urea formaldehyde, regulated radioactive materials, polychlorinated biphenyls and toxic mold.
“Hedging Obligation” of any Person means (i) any Currency Hedging Obligation designed to protect the Borrower or any of its Subsidiaries from fluctuations in currency exchange rates and not to speculate on such fluctuations and (ii) any obligations of such Person pursuant to any Interest Rate Protection Agreement.
“Historical Financial Statements” means, as of the Closing Date, (i) the unqualified audited financial statements of the Borrower and its Subsidiaries for the Fiscal Years ending December 31, 2020, December 31, 2021 and December 31, 2022, consisting of a balance sheet as of the end of, and the related consolidated statements of income, stockholders’ equity and cash flows for, each such Fiscal Year, and (ii) the unaudited financial statements of the Borrower and its Subsidiaries for the Fiscal Quarter ending March 31, 2023, consisting of a balance sheet as of the end of, and the related consolidated statements of income, stockholders’ equity and cash flows for, the Fiscal Quarter ending on such date, and, in the case of clauses (i) and (ii), certified by the chief financial officer of the Borrower that they fairly present, in all material respects, the financial condition of Borrower 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.
“Incur” means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume (pursuant to a merger, consolidation, acquisition or other transaction), Guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and “Incurrence” and “Incurred” shall have meanings correlative to the foregoing); provided, however, that a change in GAAP that results in an obligation of such Person that exists at such time becoming Indebtedness shall not be deemed an Incurrence of such Indebtedness. Indebtedness otherwise Incurred by a Person before it becomes a Subsidiary of the Borrower will be deemed to have been Incurred at the time it becomes such a Subsidiary.
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“Indebtedness” means, with respect to any Person, without duplication, whether recourse is to all or a portion of the assets of such Person and whether or not contingent:
(1) all obligations of such Person for borrowed money;
(2) all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments;
(3) every reimbursement obligation of such Person with respect to letters of credit, banker’s acceptances or similar facilities issued for the account of such Person, other than obligations with respect to letters of credit securing obligations, other than obligations referred to in clauses (1), (2) and (9) of this definition, entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the 10th day following payment on the letter of credit;
(4) every obligation of such Person for the deferred purchase price of property or services (excluding any trade payables and other accrued current liabilities incurred in the ordinary course of business which are not overdue by more than 30 days or which are being contested in good faith);
(5) all Guaranteed Indebtedness of such Person;
(6) the maximum fixed redemption or repurchase price of Disqualified Stock of such Person at the time of determination plus accrued but unpaid dividends;
(7) all obligations under Interest Rate Protection Agreements of such Person;
(8) the net amount owing under all Currency Hedging Obligations of such Person;
(9) all Capital Lease Obligations of such Person;
(10) all obligations referred to in clauses (1) through (9) above of other Persons, the payment of which is secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such obligations; provided that the amount of such Indebtedness will be the lesser of (A) the Fair Market Value of such property at such date of determination and (B) the amount of such Indebtedness.
Notwithstanding the foregoing, Indebtedness shall not include CSO Obligations. The term “Indebtedness” shall not include any lease, concession or license of property (or guarantee thereof) which would be considered an operating lease under GAAP as in effect on the Closing Date, any prepayments of deposits received from clients or customers in the ordinary course of business, or obligations under any license, permit or other approval (or guarantees given in respect of such obligations) incurred in the ordinary course of business.
20
Notwithstanding anything in this Agreement to the contrary, the calculation of Indebtedness shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” or any successor thereto (including pursuant to the Accounting Standards Codification), to value any Indebtedness of the Borrower or any Subsidiary at “fair value,” as defined therein. For the avoidance of doubt, Indebtedness does not include any liability for United States federal, state, local, foreign or other taxes owed or owing by the Borrower or any of its Subsidiaries.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Facility Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Indemnitee” has the meaning specified in Section 9.04(b).
“Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date hereof, among the Collateral Agent, the 1.5 Lien Notes Collateral Agent and the Existing Notes Collateral Agent, substantially in the form of Exhibit F, as it may be amended, restated, supplemented and/or otherwise modified from time to time.
“Interest Payment Date” means March 31, June 30, September 30, and December 31 of each year; provided, however, that if any Interest Payment Date would be a day other than a Business Day, such Interest Payment Date shall instead be the immediately preceding Business Day.
“Interest Rate Protection Agreement” means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement, option or future contract or other similar agreement or arrangement designed to protect the Borrower or any of its Subsidiaries against fluctuations in interest rates or for the purpose of fixing, hedging or swapping interest rates.
“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of direct or indirect loans (including Guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commissions, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided that an acquisition of assets, Equity Interests or other securities by the Borrower or a Subsidiary of the Borrower for consideration consisting of common equity securities of the Borrower shall not be deemed to be an Investment. If the Borrower or any Subsidiary of the Borrower sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of the Borrower such that after giving effect to any such sale or disposition, such Person is no longer a direct or indirect Subsidiary of the Borrower , the Borrower will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Equity Interests of such Subsidiary not sold or disposed of.
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The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any dividend, distribution, interest payment, return of capital, repayment or other amount received in cash by the Borrower or a Subsidiary of the Borrower in respect of such Investment.
“Law” means all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“Lender” means each financial institution listed on the signature pages hereto as a Lender, and any other Person that becomes a party hereto pursuant to an Assignment Agreement.
“Lender Appointment Period” has the meaning specified in Section 8.06.
“Lien” means any mortgage, lien (statutory or other), pledge, security interest, encumbrance, claim, hypothecation, assignment for security, deposit arrangement or preference or other security agreement of any kind or nature whatsoever.
“Liquidity” means Unrestricted Cash of the Borrower and its Subsidiaries.
“Loan” means a term loan made by a Lender to the Borrower pursuant to Section 2.01.
“Loan Party” means each of the Borrower and Guarantors.
“Loan SPV” means CURO SPV, LLC, a Delaware limited liability company.
“Make-Whole Amount” means, on any date of prepayment of all or any portion of the Loans or date of acceleration of the Loans (whether as a result of an Event of Default pursuant to Section 6.01(f) or otherwise), an amount in cash equal to the present value of (a) all interest payments (including interest payments on interest paid-in-kind) that would have been due on the Loans that are so prepaid or accelerated from the date of prepayment or acceleration through and including the second anniversary of the Closing Date had such Loans not been so prepaid or accelerated, plus (b) an amount equal to 9.00% of the aggregate principal amount of Loans prepaid or accelerated (which amount is deemed for purposes of this calculation to be due on the second anniversary of the Closing Date), in each case, discounted to the date of prepayment on a quarterly basis (assuming a 365-day year and actual days elapsed) at a rate equal to the sum of the Treasury Rate plus 0.50%.
“Margin Stock” as defined in Regulation U of the Board as in effect from time to time.
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“Material Adverse Effect” means a material adverse effect on (a) the ability of any Loan Party to perform any of its respective obligations under any of the Facility Documents, (b) the legality, validity or enforceability of any provision of this Agreement or any other Facility Document, (c) the business, financial condition or results of operations of the Loan Parties, taken as a whole, or (d) the ability of Collateral Agent (on behalf of itself and the Secured Parties) to exercise its remedies at the times and in the manner contemplated by the Collateral Document.
“Maturity Date” means the earlier of (a) the Scheduled Maturity Date and (b) the date of acceleration of the Loans pursuant to Section 6.01.
“Maximum Operating Expense to Asset Ratio” means, for each Fiscal Quarter set forth below, a ratio of (i) Operating Expenses for the four-Fiscal-Quarter period ending on the last day of such Fiscal Quarter to (ii) to the average amount of gross loans receivable (as shown on the balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP) as of the last day of each Fiscal Quarter in the five-Fiscal-Quarter period ending on the last day of such Fiscal Quarter of no greater than the applicable amount set forth below with to such Fiscal Quarter:
| Fiscal Quarter ended: | Operating Expense to Asset Ratio |
| March 31, 2024 | [***] |
| June 30, 2024 | [***] |
| September 30, 2024 | [***] |
| December 31, 2024 | [***] |
| March 31, 2025 | [***] |
| June 30, 2025 | [***] |
| September 30, 2025 | [***] |
| December 31, 2025 | [***] |
| March 31, 2026 | [***] |
| June 30, 2026 | [***] |
| September 30, 2026 | [***] |
| December 31, 2026 | [***] |
| March 31, 2027 | [***] |
| June 30, 2027 | [***] |
| September 30, 2027 | [***] |
| December 31, 2027, and thereafter | [***] |
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“Minimum Adjusted Pre-Tax Income” means, for each Fiscal Quarter set forth below, Adjusted Pre-Tax Income of the Borrower and its Subsidiaries for the four-Fiscal-Quarter period ending on the last day of such Fiscal Quarter of no less than the applicable amount set forth below with respect to such Fiscal Quarter:
| Fiscal Quarter ended: | Minimum Adjusted Pre-Tax Income |
| March 31, 2024 | [***] |
| June 30, 2024 | [***] |
| September 30, 2024 | [***] |
| December 31, 2024 | [***] |
| March 31, 2025 | [***] |
| June 30, 2025 | [***] |
| September 30, 2025 | [***] |
| December 31, 2025 | [***] |
| March 31, 2026 | [***] |
| June 30, 2026 | [***] |
| September 30, 2026 | [***] |
| December 31, 2026 | [***] |
| March 31, 2027 | [***] |
| June 30, 2027 | [***] |
| September 30, 2027 | [***] |
| December 31, 2027, and thereafter | [***] |
“Mortgages” means a collective reference to each mortgage, deed of trust, deed to secure debt and any other document or instrument under which any Lien on real property owned by the Borrower or any Guarantor is granted to secure any Obligations or under which rights or remedies with respect to any such Liens are governed.
“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA.
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“Net Proceeds” means (a) the aggregate cash proceeds received by the Borrower or any of its Subsidiaries in respect of any Asset Sale (including any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (i) the direct costs relating to such Asset Sale (including legal, accounting and investment banking fees and sales commissions), (ii) any relocation expenses Incurred as a result thereof, (iii) taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), (iv) amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale which Lien is senior in priority to the Liens on such asset or assets securing the Obligations granted by the Collateral Documents, if any, and (v) any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP and (b) the cash proceeds from the incurrence, issuance or sale by the Borrower or any Subsidiary of any Indebtedness (other than Indebtedness permitted by Section 5.18), net of all fees (including investment banking fees), commissions, costs and other expenses, in each case incurred in connection with such issuance or sale.
“New Canadian Receivables SPV” means a Qualified Receivables Facility denominated in Canadian Dollars with terms in form and substance satisfactory to the Required Ad Hoc Group Lenders.
“Non-Public Information” means information which has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD.
“Note” means a note evidencing the Loans of a Lender in the form of Exhibit B hereto.
“Obligations” means (i) all obligations of every nature of each Loan Party from time to time owed to the Secured Parties under any Facility Document whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Loan Party, would have accrued on any Obligation, whether or not a claim is allowed against such Loan Party for such interest in the related bankruptcy proceeding), fees, expenses, indemnification or otherwise and (ii) all Additional Secured Obligations; provided that Obligations of a Loan Party shall exclude any Excluded Swap Obligations with respect to such Loan Party.
“One Time Expense Cap“ means $[***]; provided, that the One Time Expense Cap shall be increased by an amount equal to the amount of any cost-savings set forth in the Business Plan and realized by the Borrower or any of its Subsidiaries in the period covered by the Business Plan included in the applicable period of four Fiscal Quarters; provided, further, that under no circumstances will the One Time Expense Cap exceed $[***].
“Operating Expenses” means, with respect to any Person(s) for any period, the operating expenses of such Person(s) for such period, determined in accordance with GAAP on a consolidated basis, excluding, to the extent otherwise included in Operating Expenses, (a) one-time costs solely to the extent consisting of (i) transaction costs, restructuring expenses, expenses associated with sold or discontinued businesses and/or product lines and regulatory and legal charges in an aggregate amount during any period of four Fiscal Quarters not to exceed the One Time Expense Cap and (ii) goodwill impairments, (b) non-cash gains or losses arising from the disposition of assets (other than loans and receivables) outside of the ordinary course of business, including gains or losses realized on the disposition of the Flexiti line of business, and (c) depreciation and amortization (including amortization of goodwill and other intangibles).
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“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Administrative Agent. The counsel may be an employee of or counsel to the Borrower.
“Organizational Documents” means, as applicable, for any Person, such Person’s articles or certificate of incorporation, by-laws, memorandum and articles of association, partnership agreement, trust agreement, certificate of limited partnership, articles of organization, certificate of formation, shareholder agreement, voting trust agreement, operating agreement, subscription agreement, limited liability company agreement and/or analogous documents, as amended, modified or supplemented from time to time.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Facility Document, or sold or assigned an interest in any Loan or Facility Document).
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Facility Document, except any such Taxes that result from an assignment (other than any assignment requested or required by the Borrower) pursuant to Section 9.05 and are imposed as a result of a connection between the Recipient and the taxing jurisdiction (other than a connection arising solely from any Facility Document or any transactions contemplated thereunder).
“Participant Register” has the meaning set forth in Section 9.05(g)(iv).
“Payment Notice” as defined in Section 2.15(i)(B).
“Payment Recipient” as defined in Section 2.15(i)(A).
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 or Section 430 of the Code or Section 302 or Title IV of ERISA.
“Permitted Acquisition” has the meaning set forth in clause 3 of the definition of Permitted Investments.
“Permitted Equity Issuance” means any issuance of Equity Interests (other than Disqualified Stock) by the Borrower permitted under this Agreement.
“Permitted Holders” means the Founders.
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“Permitted Investments” means:
(1) (x) any Investment in the Borrower or any Subsidiary of the Borrower (other than a Receivables Entity and other than Loan SPV); provided that the Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value) of all Investments by the Loan Parties in Subsidiaries of the Borrower other than Loan Parties pursuant to this clause (x) of paragraph (1), together with all Investments pursuant to paragraph (3) below outstanding at such time, shall not exceed $10 million and (y) any Investment in any Canadian Subsidiary (other than a Receivables Entity) in the form of cash or Cash Equivalents made in the ordinary course of business; provided that the assets held by such Canadian Subsidiary in which an Investment is made pursuant to this clause (y) of paragraph (1) consist entirely of assets comprising the Canadian direct-lending line of business (other than de minimis assets) (any Subsidiary described in this clause (y), a “Canadian Direct Lending Subsidiary”);
(2) any Investment in cash or Cash Equivalents;
(3) any Investment by the Borrower or any Subsidiary of the Borrower in a Person, if as a result of such Investment (A) such Person becomes a Subsidiary of the Borrower (other than a Receivables Entity and other than Loan SPV) or (B) such Person is merged or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Borrower or a Subsidiary of the Borrower (other than a Receivables Entity and other than Loan SPV); provided that the Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value) of all Investments pursuant to this paragraph (3), together with all Investments by Loan Parties in Subsidiaries of the Borrower other than Loan Parties pursuant to clause (x) of paragraph (1) above outstanding at such time, shall not exceed $10 million (any Investment pursuant to this clause (3), a “Permitted Acquisition”);
(4) any Investment existing on the Closing Date (and set forth on Schedule 1.01(A) attached hereto) or made pursuant to binding commitments in effect on the Closing Date (and set forth on Schedule 1.01(A) attached hereto) or an Investment consisting of any extension, modification or renewal of any Investment existing on the Closing Date (and set forth on Schedule 1.01(A) attached hereto); provided that the amount of any such Investment may be increased only (x) as required by the terms of such Investment as in existence on the Closing Date or (y) as otherwise permitted under this Agreement;
(5) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 5.19;
(6) Hedging Obligations that are Incurred by the Borrower or any of its Subsidiaries for the purpose of fixing or hedging (A) interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Agreement to be outstanding or (B) currency exchange risk in connection with existing financial obligations and not for purposes of speculation;
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(7) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits;
(8) loans and advances to officers, directors and employees of the Borrower and its Subsidiaries in the ordinary course of business not to exceed $2.5 million in the aggregate at any one time outstanding;
(9) any Investment consisting of a Guarantee permitted by Section 5.18;
(10) (a) the issuance of Loans on the Closing Date in an aggregate initial principal amount equal to $[***] to Loan SPV and (b) any redemption or repurchase of the Backstop Notes by Loan SPV in accordance with the terms thereof;
(11) Investments received in settlement of bona fide disputes or as distributions in bankruptcy, insolvency, foreclosure or similar proceedings, in each case in the ordinary course of business;
(12) advances to customers or suppliers in the ordinary course of business;
(13) Investments consisting of purchases and acquisitions of supplies, materials and equipment or purchases or contract rights or licenses of intellectual property, in each case in the ordinary course of business;
(14) receivables owing to the Borrower or any of its Subsidiaries if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;
(15) CSO Obligations of the Borrower and its Subsidiaries incurred in the ordinary course of business;
(16) Investments consisting of obligations of officers and employees to the Borrower or its Subsidiaries in connection with such officer’s and employees’ acquisition of Equity Interests in the Borrower (other than Disqualified Stock) so long as no cash is actually advanced by the Borrower or any of its Subsidiaries in connection with the acquisition of such obligations); or
(17) Investments in a Receivables Entity, or any Investment by a Receivables Entity in any other Person, in each case, in connection with a Qualified Receivables Transaction, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Transaction or any related Indebtedness; provided, however, that any Investment in a Receivables Entity is in the form of a purchase money note, contribution or sale of receivables or an equity interest.
“Permitted Liens” means:
(1) subject to the terms of the Intercreditor Agreement, Liens on the Collateral securing Indebtedness permitted to be Incurred pursuant to Section 5.18(b)(i) (which shall be junior in priority to the Liens securing the Obligations or any Guarantees thereof);
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(2) Liens in favor of the Borrower or a Guarantor;
(3) Liens on the Loans held by Loan SPV, the proceeds of such Loans, and the other assets of Loan SPV, in each case securing the Backstop Notes;
(4) [reserved;]
(5) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds, workmen’s compensation or unemployment obligations or other obligations of a like nature, or to secure letters of credit issued with respect to such obligations, Incurred in the ordinary course of business;
(6) Liens consisting of deposits in connection with leases or other similar obligations, or securing letters of credit issued in lieu of such deposits, incurred in the ordinary course of business, and cash deposits in connection with acquisitions otherwise permitted under this Agreement;
(7) [reserved;]
(8) Liens existing on the Closing Date (provided that such Liens, to the extent securing obligations in excess of $1 million individually or $2 million in the aggregate, are set forth on Schedule 1.01(B)) and replacement Liens that do not encumber additional assets or secure increased obligations, unless such encumbrance is otherwise permitted;
(9) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent for more than 30 days or that are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;
(10) Liens securing Permitted Refinancing Debt other than Indebtedness incurred pursuant to Section 5.18(b)(i); provided that the obligor under such Indebtedness was permitted to Incur such Liens with respect to the Indebtedness so refinanced under this Indenture and:
(a) the new Lien is limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof);
(b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such Permitted Refinancing Debt; and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge; and
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(c) if the original Lien is on any portion of the Collateral and junior in priority to the Liens securing the Obligations and the Guarantees thereof, the new Lien shall be junior in priority to the Liens securing the Obligations and the Guarantees thereof;
(11) statutory and common law Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other similar Liens arising in the ordinary course of business with respect to amounts that are not yet delinquent for more than 30 days or that are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;
(12) Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;
(13) Liens arising from filings of UCC financing statements or similar documents regarding leases or otherwise for precautionary purposes relating to arrangements not constituting Indebtedness;
(14) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Borrower or any of its Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrower and its Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Borrower or any of its Subsidiaries in the ordinary course of business;
(15) Liens securing the Obligations or any Guarantees thereof;
(16) [reserved;]
(17) [reserved;]
(18) encumbrances or exceptions expressly permitted pursuant to the Mortgages;
(19) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, including Liens securing letters of credit issued in the ordinary course of business in connection therewith;
(20) [reserved;]
(21) Liens on the property or assets of the Canadian Recourse Facility Borrower securing the Canadian Recourse Facility; and
(22) any Lien on (a) loans receivable and related assets of the types specified in the definition of “Qualified Receivables Transaction” transferred to a Receivables Entity or on assets of a Receivables Entity or (b) Servicer Accounts, in each case under clauses (a) or (b), granted in connection with (and as security for) a Qualified Receivables Transaction.
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For purposes of this definition, the term “Indebtedness” shall be deemed to include interest in connection with or in respect of any referenced Indebtedness.
“Permitted Refinancing Debt” means any Indebtedness of the Borrower or any of its Subsidiaries issued in exchange for, or the net cash proceeds of which are used to extend, refinance (including through the issuance of debt securities), renew, replace (whether or not upon termination and whether with the original lenders, institutional investors or otherwise), defease or refund other Indebtedness of the Borrower or any of its Subsidiaries, in whole or in part; provided that:
(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Debt does not exceed the principal amount and premium, if any, plus accrued interest (or accreted value, if applicable) of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of any fees and expenses Incurred in connection therewith);
(2) such Permitted Refinancing Debt has a final scheduled maturity date later than the final scheduled maturity date of, and has a Weighted Average Life equal to or greater than the Weighted Average Life of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is (i) subordinated in right of payment to the Obligations or any Guarantee thereof, such Permitted Refinancing Debt is subordinated in right of payment to, the Obligations or any Guarantee thereof on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, (ii) secured by Liens on any of the Collateral junior in priority to the Liens securing the Obligations or any Guarantee thereof, such Permitted Refinancing Debt is either unsecured or secured by Liens on any of the Collateral junior in priority to the Liens securing the Obligations or any Guarantee thereof on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded or (iii) unsecured, such Permitted Refinancing Debt is unsecured; and
(4) such Indebtedness is incurred either by the Borrower or by the Subsidiary of the Borrower that is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded or would otherwise be permitted to Incur such Indebtedness.
“Person” means any individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, association, estate, organization, joint venture or other entity, or a government or any agency or political subdivision or agency thereof.
“Platform” has the meaning set forth in Section 5.04.
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“Pledge Agreement” means the Pledge Agreement, dated as of the Closing Date, among the Borrower and the Guarantors in favor of the Collateral Agent, as amended or supplemented from time to time in accordance with its terms.
“Preferred Stock” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.
“Prepayment Notice” has the meaning set forth in Section 2.13(a).
“Prepayment Premium” has the meaning set forth in Section 2.13(b).
“Principal Office” means, for the Administrative Agent, its “Principal Office” or account which may include such other office or office of a third party or sub-agent, as appropriate, as such Person may from time to time designate in writing to the Borrower, the Administrative Agent and each Lender.
“Pro Rata Share” means, with respect to all payments, computations and other matters relating to the Commitment or Loans of any Lender or any participations purchased therein by any Lender, as the context requires, the percentage obtained by dividing (x) the Exposure of that Lender by (y) the aggregate Exposure of all Lenders.
“PTE” shall mean a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Qualified ECP Guarantor” means, at any time, each Loan Party with total assets exceeding $10,000,000 or that qualifies at such time as an “eligible contract participant” under the Commodity Exchange Act and can cause another Person to qualify as an “eligible contract participant” at such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
“Qualified Receivables Facility” means any Indebtedness incurred in connection with a Qualified Receivables Transaction. Each of the Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility, as in effect on the Closing Date, shall constitute a Qualified Receivables Facility.
“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by the Borrower or any of the Subsidiaries pursuant to which the Borrower or any of the Subsidiaries may sell, convey or otherwise transfer to:
(1) a Receivables Entity (in the case of a transfer by the Borrower or any of the Subsidiaries); or
(2) any other Person (in the case of a transfer by a Receivables Entity),
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or may grant a security interest in, any loans receivable (whether now existing or arising in the future) of the Borrower or any of the Subsidiaries, and any assets related thereto, including all collateral securing such loans receivable, all contracts and all Guarantees or other obligations in respect of such loans receivable, proceeds of such loans receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving loans receivable or refinancings thereof; provided, however, that the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the chief financial officer of the Borrower ).
For the avoidance of doubt, each of the transactions contemplated by each of the Existing Heights SPV Facility, the Existing First Heritage SPV Facility, the Existing Revolving Canada SPV Facility, the Existing Flexiti Securitization Notes and the Existing Flexiti SPV Facility (each as in effect on the Closing Date (after giving effect to Section 3.01(j))) is a “Qualified Receivables Transaction.”
“Receivables Entity” means (a) a Wholly-Owned Subsidiary of the Borrower or (b) another Person, engaging in a Qualified Receivables Transaction with the Borrower, in each case, that engages in no activities other than in connection with the financing of loans receivables and is designated by the Board of Directors of the Borrower (as provided below) as a Receivables Entity, and in either of clause (a) or (b):
(1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of such entity:
(A) is Guaranteed by the Borrower or any Subsidiary of the Borrower (excluding Guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings),
(B) is recourse to or obligates the Borrower or any Subsidiary of the Borrower in any way (other than pursuant to Standard Securitization Undertakings), or
(C) subjects any property or asset of the Borrower or any Subsidiary of the Borrower, directly or indirectly, contingently or otherwise, to the satisfaction thereof (other than pursuant to Standard Securitization Undertakings);
(2) the entity is not an Affiliate of the Borrower or is an entity with which neither the Borrower nor any Subsidiary of the Borrower has any material contract, agreement, arrangement or understanding other than on terms that the Borrower reasonably believes to be not materially less favorable to the Borrower or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Borrower; and
(3) is an entity to which neither the Borrower nor any Subsidiary of the Borrower has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Board of Directors of the Borrower shall be evidenced to the Administrative Agent by filing with the Administrative Agent a certified copy of the resolution of such Board of Directors giving effect to such designation and an officer’s certificate certifying that such designation complied with the foregoing conditions.
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Each of Heights Financing I, LLC, First Heritage Financing I, LLC, CURO Canada Receivables GP, Inc., CURO Canada Receivables Limited Partnership, Flexiti Securitization General Partner, Inc., Flexiti Securitization Limited Partnership, and Flexiti Financing SPE Corp. is deemed to have been designated as a Receivables Entity as of the Closing Date.
“Recipient” means (a) the Administrative Agent and (b) any Lender, as applicable.
“Register” has the meaning specified in Section 2.08(b).
“Regulation D” means Regulation D of the Board, as in effect from time to time.
“Regulation FD” means Regulation FD as promulgated by the SEC under the Securities Act and Exchange Act.
“Regulation T” means Regulation T issued by the Board.
“Regulation U” means Regulation U issued by the Board.
“Regulation X” means Regulation X issued by the Board.
“Related Fund” means, with respect to any Lender that is a fund that invests in bank or commercial loans and similar extensions of credit, any other fund that invests in bank or commercial loans and similar extensions of credit and is advised or managed by (a) such Lender, (b) an Affiliate of such Lender or (c) an entity (or an Affiliate of such entity) that administers, advises or manages such Lender.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, trustees, officers, employees, shareholders, controlling Persons, counsel, representatives, attorneys-in-fact, agents and advisors of such Person and of such Person’s Affiliates and each of their heirs, successors and assigns.
“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 Ad Hoc Group Lenders” means, as of any date of determination, Lenders in the Ad Hoc Group holding more than 50% of the sum of the aggregate Exposure of all Lenders in the Ad Hoc Group.
“Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of the aggregate Exposure of all Lenders; provided that “Required Lenders” shall always include at least two (2) unaffiliated Lenders if there are two or more unaffiliated Lenders.
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“Resolution Authority” shall mean an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Restricted Investment” means an Investment other than a Permitted Investment.
“Restricted Payments” has the meaning specified in Section 5.16.
“Scheduled Maturity Date” means August 2, 2027.
“SEC” means the United States Securities and Exchange Commission and any successor Governmental Authority performing a similar function.
“Secured Hedging Obligations” means all Hedging Obligations of any Loan Party pursuant to an agreement with any person that, at the time it enters into such agreement (or on the Closing Date), is an Agent, a Lender or an Affiliate of an Agent or a Lender; provided that obligations under such agreement are not designated by notice delivered by the Borrower to the Administrative Agent to be excluded from being Secured Hedging Obligations.
“Secured Parties” has the meaning set forth in the Security Agreement.
“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.
“Security Agreement” means the Security Agreement, dated as of the Closing Date, among the Borrower and the Guarantors in favor of the Collateral Agent, as amended or supplemented from time to time in accordance with its terms.
“Servicer Account” means any deposit account or securities account used as a collection account for loans receivable contributed or sold to the applicable Receivables Entity that is periodically swept to a zero balance or subject to a requirement to transfer collections therefrom on a periodic basis.
“Set-off Party” has the meaning specified in Section 9.12.
“Similar Business” means any business conducted or proposed to be conducted by the Borrower and its Subsidiaries on the Closing Date or any business that is similar, reasonably related, incidental, complementary or ancillary thereto, or a reasonable extension or expansion thereof.
“Solvent” means, with respect to the Borrower and any of its Subsidiaries on a consolidated basis, that as of the date of determination, both (i) (a) the sum of the Borrower and its Subsidiaries’ debt (including contingent liabilities) does not exceed the present fair saleable value of the Borrower’s and its Subsidiaries’ present assets; (b) the Borrower and its Subsidiaries’ capital is not unreasonably small in relation to its business as contemplated on the Closing Date or with respect to any transaction contemplated to be undertaken after the Closing Date; and (c) such Person has not incurred and does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (ii) such Person is “solvent” within the meaning given that term and similar terms under the Bankruptcy Code and applicable Laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, 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 Standard No. 5).
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“Specified Loan Party” means any Loan Party that is not then an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section 7.10).
“Standard Securitization Undertakings” means representations, warranties, covenants and indemnities entered into by the Borrower or any Subsidiary of the Borrower that, taken as a whole, are customary for a non-recourse loans receivable financing transaction.
“Subsidiary” of any Person means:
(1) any corporation of which more than 50% of the outstanding shares of Capital Stock having ordinary voting power for the election of directors is owned directly or indirectly by such Person; and
(2) any partnership, limited liability company, association, joint venture, business trust or other entity in which such Person, directly or indirectly, has at least a majority ownership interest entitled to vote at the election of directors, managers or trustees thereof (or other person performing similar functions).
Except as otherwise indicated herein, references to Subsidiaries shall refer to Subsidiaries of the Borrower.
“Swap Agreement” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, repurchase transactions, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Swap Master Agreement”), including any such obligations or liabilities under any Swap Master Agreement.
“Swap Master Agreement” has the meaning set forth in the definition of Swap Agreement.
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“Swap Obligations” means with respect to any Guarantor any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
“Tax” means any present or future tax, levy, impost, duty, assessment, deduction or withholding or similar charges in the nature of a tax imposed by any Governmental Authority (and interest, fines, penalties and additions related thereto).
“Treasury Rate” means, at any prepayment date, the yield to maturity as of such prepayment date of constant maturity United States Treasury securities (as compiled and published in the most recent Federal Reserve Statistical Release H. 15 (519) that has become publicly available at least two Business Days prior to such prepayment date (or, if such statistical release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such prepayment date to the second anniversary of the Closing Date; provided, however, that if no published maturity exactly corresponds with such date, then the Treasury Rate shall be interpolated or extrapolated on a straight-line basis from the arithmetic mean of the yields for the next shortest and next longest published maturities; provided further, however, that if the period from such prepayment date to the second anniversary of the Closing Date, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
“Transactions” means the borrowing of Loans by the Borrower under this Agreement contemplated to be funded on the Closing Date, and the payment of fees and expenses, incurred in connection with the foregoing.
“UK Financial Institution” shall mean any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” shall mean the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“U.S. Lender” has the meaning set forth in Section 2.19(c).
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.
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“Unrestricted Cash” means, with respect to any Person(s), cash or Cash Equivalents of such Person(s) that would not appear as “restricted” on a consolidated balance sheet of such Person(s).
“Voting Stock” of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.
“Weighted Average Life” means, as of any date, with respect to any Indebtedness, the quotient obtained by dividing (1) the sum of the products of the number of years from such date to the dates of each successive scheduled principal payment (including any sinking fund payment requirements) of such Indebtedness multiplied by the amount of such principal payment, by (2) the sum of all such principal payments.
“Wholly-Owned Subsidiary” of any Person means a Subsidiary of such Person all of the outstanding Capital Stock of which (other than directors’ qualifying shares and nominal amounts required to be held by local nationals) shall at the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person (or any combination thereof).
“Write-Down and Conversion Powers” shall mean, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
Section 1.02 Computation of Time Periods. In this Agreement in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”
Section 1.03 Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis. If at any time any change in GAAP would affect the computation of any provision (including any definition, financial ratio or requirement set forth in any Facility Document), and either the Borrower or Administrative Agent shall so request, Administrative Agent and Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to Administrative Agent financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.
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Section 1.04 Principles of Construction. All references to Articles, Sections, Schedules, Exhibits, and Appendices are to Articles, Sections, Schedules, Exhibits, and Appendices in or to this Agreement unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All references to agreements and other contractual instruments shall be deemed to include subsequent amendments, permitted assignments and other modifications thereto, but only to the extent such amendments, assignments and other modifications are not prohibited by the terms of any Facility Document. Furthermore, any reference to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such Law and any reference to any Law or regulation shall, unless otherwise specified, refer to such Law or regulation as amended, modified or supplemented from time to time.
Section 1.05 [Reserved].
Section 1.06 Divisions. Any restriction, condition or prohibition applicable to a merger, transfer, consolidation, amalgamation, assignment, sale or transfer, or similar term set forth in the Facility Documents shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company, as if it were a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale or transfer, or similar term, as applicable. Any reference in any Facility Document to a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation, amalgamation, assignment, sale or transfer, or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company shall constitute a separate Person under the Facility Documents (and each division of any limited liability company that is a Subsidiary, joint venture or any other like term shall also constitute such a Person or entity.
Article II
AMOUNTS AND TERMS OF THE LOANS
Section 2.01 Commitments. Subject to the terms and conditions hereof, each Lender agrees, severally and not jointly, to make Loans to the Borrower on the Closing Date in an aggregate amount not to exceed such Lender’s Commitment. The full amount of the Commitments must be drawn in a single drawing on the Closing Date and amounts of Loans that are repaid or prepaid may not be reborrowed.
Section 2.02 Borrowing Mechanics for Loans.
(a) [Reserved.]
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(b) If the Borrower desires that Lenders make Loans to it on the Closing Date, the Borrower shall deliver to the Administrative Agent a fully executed and delivered Borrowing Request not later than 12:00 noon (New York time) at least one Business Day in advance of the Closing Date; provided that a Borrowing Notice may state that such notice is conditioned upon the occurrence of the Closing Date, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.
(c) [Reserved.]
(d) Notice of receipt of each Borrowing Request in respect of Loans, together with the amount of each Lender’s Pro Rata Share thereof, if any, together with the applicable interest rate, shall be provided by the Administrative Agent to each Lender by electronic mail with reasonable promptness, but (provided the Administrative Agent shall have received such notice by 12:00 noon (New York time)) on the same day as the Administrative Agent’s receipt of such notice from the Borrower.
(e) Each Lender shall make the amount of its Loan available to the Administrative Agent not later than 12:00 noon (New York time) on the Closing Date by wire transfer of same day funds in Dollars at the Principal Office designated by the Administrative Agent. Except as provided herein, upon satisfaction or waiver of the conditions precedent specified herein and receipt of all applicable funds from the Lenders, the Administrative Agent shall make the proceeds of such Loans available to the Borrower on the Closing Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Loans received by the Administrative Agent from Lenders to be credited to the account of the Borrower at the Principal Office designated by the Administrative Agent or such other account as may be designated in writing to the Administrative Agent by the Borrower.
Section 2.03 Payment of Loans. Notwithstanding any other provision hereof or of any other Facility Document, all Loans, all accrued interest thereon and all other Obligations (other than Additional Secured Obligations) shall be payable by the Borrower on the Maturity Date.
Section 2.04 [Reserved].
Section 2.05 [Reserved].
Section 2.06 Pro Rata Shares; Availability of Funds.
(a) Pro Rata Shares. All Loans (other than fees paid in kind in accordance with the terms of the Facility Documents, which shall be paid as set forth therein) shall be made by Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder nor shall any Commitment of any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder.
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(b) Availability of Funds. Unless the Administrative Agent shall have been notified by any Lender prior to the applicable Closing Date that such Lender does not intend to make available to the Administrative Agent the amount of such Lender’s Loan requested on the Closing Date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such Closing Date and the Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to the Borrower a corresponding amount on such Closing Date. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from the Closing Date until the date such amount is paid to the Administrative Agent, at the customary rate set by the Administrative Agent for the correction of errors among banks. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower and the Borrower shall within five (5) Business Days pay such corresponding amount to the Administrative Agent together with interest thereon, for each day from the Closing Date until the date such amount is paid to the Administrative Agent. Nothing in this Section 2.06(b) shall be deemed to relieve any Lender from its obligation to fulfill its Commitment hereunder or to prejudice any rights that the Borrower may have against any Lender as a result of any default by such Lender hereunder.
Section 2.07 Use of Proceeds. The proceeds of the Loans shall be applied by the Borrower to (a) repayment in full of the Bay Coast Revolving Credit Facility, (b) the payment of fees and expenses relating to the Transactions and (c) other general corporate purposes. No portion of the proceeds of any Loan shall be used in any manner that causes or might cause such Loan or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board or any other regulation thereof or to violate the Exchange Act.
Section 2.08 Evidence of Indebtedness; Register; Notes.
(a) Lenders’ Evidence of Indebtedness. Each Lender shall maintain on its internal records an account or accounts evidencing the Obligations of the Borrower to such Lender, including the amounts of the Loans made by it, the amount of interest and fees paid to it in kind and each repayment and prepayment in respect thereof. Any such recordation shall be conclusive and binding on the Borrower, absent manifest error; provided that the failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Commitment or the Borrower’s Obligations in respect of any Loans; provided, further, that in the event of any inconsistency between the Register and any Lender’s records, the recordations in the Register shall govern.
(b) Register. The Administrative Agent (or its agent or sub-agent appointed by it), as a non-fiduciary agent of Borrower, shall maintain at its Principal Office a register for the recordation of the names and addresses of Lenders and the Commitment and Loans of each Lender from time to time (the “Register”). The Register shall be available for inspection by the Borrower or any Lender (with respect to any entry relating to such Lender’s Loans) at any reasonable time and from time to time upon reasonable prior written notice. The Administrative Agent shall record, or shall cause to be recorded, in the Register the Commitments and the Loans in accordance with the provisions of Section 9.05, any payment of interest or fees in kind and each repayment or prepayment in respect of the principal amount of the Loans, and any such recordation shall be conclusive and binding on the Borrower and each Lender, absent manifest error; provided that failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Commitment or the Borrower’s Obligations in respect of any Loan. The Borrower hereby designates the Administrative Agent to serve as the Borrower’s non-fiduciary agent solely for purposes of maintaining the Register as provided in this Section 2.08, and the Borrower hereby agrees that, to the extent the Administrative Agent serves in such capacity, the Administrative Agent and its officers, directors, employees, agents, sub-agents and affiliates shall constitute Indemnitees.
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(c) Notes. If so requested by any Lender by written notice to the Borrower (with a copy to the Administrative Agent) at least two (2) Business Days prior to the Closing Date, or at any time thereafter, the Borrower shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to Section 9.05) on the Closing Date (or, if such notice is delivered after the Closing Date, promptly after the Borrower’s receipt of such notice) a Note or Notes to evidence such Lender’s Loan.
Section 2.09 Interest on Loans.
(a) Except as otherwise set forth herein, the Loans shall bear interest on the unpaid principal amount thereof from the date made through repayment (whether by acceleration or otherwise) thereof at a rate equal to 18.00% per annum.
(b) [Reserved].
(c) Except as otherwise set forth herein, interest on each Loan shall be payable in cash; provided that the Borrower may elect to pay interest partially in cash and partially in kind as follows: (i) from the Closing Date until the first anniversary of the Closing Date, the Borrower may elect to pay up to 12.00% per annum in kind and the remainder of such interest in cash and (ii) thereafter, the Borrower may elect to pay up to 9.00% per annum in kind and the remainder of such interest in cash. Borrower shall deliver written notice of its election to pay less than all interest in cash to the Administrative Agent at least six (6) Business Days prior to the applicable Interest Payment Date; if the Borrower does not submit such notice, the Borrower shall be deemed to have elected to pay interest in kind to the maximum permissible extent. Any interest that is paid in kind shall be capitalized and added to the outstanding principal amount of the Loans and constitute Loans for all purposes under the Facility Documents and shall be payable as part of the outstanding principal amount of the Loans upon any prepayment of the Loans in accordance with the terms of the Facility Documents, whether voluntary or mandatory, and shall be payable in cash as part of the outstanding principal amount of the Loans upon the Maturity Date. All capitalized amounts shall constitute principal of the Loans and shall accrue interest from the date capitalized at the rate at which the Loans accrue interest, payable in accordance with this Section 2.09.
(d) Except as otherwise set forth herein, interest on each Loan shall be computed on the basis of a 365-day year, for the actual number of days elapsed in the period during which it accrues. In computing interest on any Loan, the date of the making of such Loan shall be included, and the date of payment of such Loan shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.
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(e) Except as otherwise set forth herein, interest on each Loan (i) shall accrue on a daily basis and shall be payable in arrears on each Interest Payment Date with respect to interest accrued on and to each such payment date; (ii) shall accrue on a daily basis and shall be payable in arrears upon any prepayment of such Loan, whether voluntary or mandatory, to the extent accrued on the amount being prepaid; and (iii) shall accrue on a daily basis and shall be payable in arrears at maturity or upon acceleration of such Loan.
Section 2.10 [Reserved].
Section 2.11 Default Interest; Late Fees. If (a) all or any portion of the principal amount of or interest on any Loan shall not be paid when due (whether at stated maturity, by acceleration or otherwise) or (b) an Event of Default shall occur and be continuing, the applicable portion of such Obligations or, as to clause (b), all outstanding Loans (whether or not overdue) shall bear interest, from the date of such nonpayment until such amount is paid in full or from the date of occurrence of such Event of Default until such Event of Default ceases to be continuing, at a rate per annum (the “Default Rate”) that is equal to the rate that would otherwise be applicable to such loans pursuant to Section 2.09 plus 2.00% per annum. Payment or acceptance of the increased rates of interest provided for in this Section 2.11 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of the Administrative Agent or any Lender. Interest accruing pursuant to this Section 2.11 is payable on demand in cash in arrears.
Section 2.12 Fees.
(a) The Borrower agrees to pay on the Closing Date to the Administrative Agent, for the ratable account of each Lender, an upfront fee equal to 2.50% of the aggregate principal amount of the Loans funded on the Closing Date, which fee shall be paid in kind and added to the principal amount of the Loans outstanding.
(b) The Borrower shall pay to the Agents, for the account of the Agents, the fees and other amounts set forth in the Agent Fee Letter in the amounts, and at the times, specified therein.
(c) The Borrower shall pay to the applicable counterparties, for the account of such counterparties, the fees and other amounts set forth in each other fee letter constituting a Facility Document in the amounts, and at the times, specified therein.
(d) All fees referred to in this Section 2.12 shall, except as otherwise stated, be paid to the Administrative Agent at its Principal Office and upon receipt, the Administrative Agent shall promptly distribute such fees to the stated recipients thereof. Any fees that are paid in kind (whether pursuant to this Section 2.12 or any other Facility Document) shall be capitalized and added to the outstanding principal amount of the Loans and constitute Loans for all purposes under the Facility Documents and shall be payable as part of the outstanding principal amount of such Loans upon any prepayment of such Loans in accordance with the terms of the Facility Documents, whether voluntary or mandatory, and shall be payable in cash as part of the outstanding principal amount of such Loans upon the Maturity Date. All capitalized amounts shall constitute principal of the Loans and shall accrue interest from the date capitalized at the rate at which the Loans accrue interest, payable in accordance with Section 2.09.
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Section 2.13 Voluntary Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right at any time and from time to time to prepay any Loan in whole or in part, without premium or penalty (except as set forth in Section 2.13(b) and subject to prior notice in accordance with the provisions of this Section 2.13) in an aggregate principal amount equal to $500,000, any integral multiple thereof in excess of $500,000 or the aggregate principal amount outstanding. The Borrower shall provide written notice to the Administrative Agent of the voluntary prepayment of any Loans (the “Prepayment Notice”) not later than 2:00 p.m. (New York City time) at least three (3) Business Days prior to such voluntary prepayment. Each such Prepayment Notice shall be irrevocable and the principal amount of the Loans specified therein shall become due and payable on the prepayment date specified therein; provided that a notice of prepayment may state that such notice is conditioned upon the effectiveness of other credit facilities, indentures or similar agreements or other transactions, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. All voluntary prepayments of Loans shall be accompanied by accrued and unpaid interest on the principal amount repaid.
(b) If the Borrower elects to prepay any Loans on a prepayment date prior to the fourth anniversary of the Closing Date, then the Borrower shall pay to the Administrative Agent, for the ratable account of each Lender, a prepayment premium calculated as follows (the “Prepayment Premium”):
(i) if the prepayment date occurs at any time prior to the second anniversary of the Closing Date, the Make-Whole Amount;
(ii) if the prepayment date occurs at any time from or after the second anniversary of the Closing Date but prior to the third anniversary of the Closing Date, 9.00% of the aggregate principal amount of Loans being prepaid;
(iii) if the prepayment date occurs at any time from or after the third anniversary of the Closing Date but prior to the fourth anniversary of the Closing Date, 4.50% of the aggregate principal amount of Loans being prepaid.
(c) Any such voluntary prepayment shall be applied ratably to the Loans of each Lender.
Section 2.14 Mandatory Prepayments. (a) The Borrower shall apply (i) all Net Proceeds of Asset Sales permitted by Section 5.19(r) and of all Events of Loss, in each case to the extent in excess of $10 million in the aggregate for all such transactions and occurrences since the Closing Date and (ii) all Net Proceeds of Incurrences of Indebtedness not permitted by Section 5.18 to prepay Loans within 5 Business Days after receipt thereof.
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(b) All mandatory prepayments of Loans shall be accompanied by (1) accrued and unpaid interest on the principal amount repaid and (2) if such mandatory prepayment is made prior to the fourth anniversary of the Closing Date, the Prepayment Premium, calculated as if Loans in a principal amount equal to the amount of such mandatory prepayment were being voluntarily prepaid on the date of such mandatory prepayment.
(c) The Borrower shall notify the Administrative Agent in writing of any mandatory prepayment of Loans not later than 2:00 p.m. (New York City time) five (5) Business Days prior to the date of such mandatory prepayment. Each such notice shall specify the date of such mandatory prepayment and provide a reasonably detailed calculation of the amount of such prepayment, the interest payable in connection therewith, and, if applicable the Prepayment Premium. The Administrative Agent will promptly notify each Lender of the contents of any such prepayment notice and of such Lender’s ratable portion of such prepayment. Any such mandatory prepayment shall be applied ratably to the Loans of each Lender; provided that any Lender (a “Declining Lender” and any Lender which is not a Declining Lender, an “Accepting Lender”) may elect, by delivering written notice to the Administrative Agent and the Borrower not later than 3:00 p.m. (New York City time) one (1) Business Day after the date of such Lender’s receipt of notice from the Administrative Agent regarding such prepayment, that any amount of any mandatory prepayment otherwise required to be made with respect to the Loans held by such Lender not be made (the aggregate amount of such prepayments declined by the Declining Lenders, the “Declined Prepayment Amount”); provided further if a Lender fails to deliver notice setting forth such rejection of a prepayment to the Administrative Agent within the time frame specified above or such notice fails to specify the principal amount of the Loans to be rejected, any such failure will be deemed an acceptance of the total amount of such mandatory prepayment of Loans; provided further that Loan SPV shall be treated as a Declining Lender with respect to the portion of any such mandatory prepayment that it elects not be made and an Accepting Lender with respect to the portion of any such mandatory prepayment that it elects to be made. In the event that the Declined Prepayment Amount is greater than $0, the Administrative Agent will promptly notify each Accepting Lender of the amount of such Declined Prepayment Amount and of any such Accepting Lender’s ratable portion of such Declined Prepayment Amount (based on such Lender’s pro rata share of the Loans other than the Loans of Declining Lenders)). Any such Accepting Term Lender may elect, by delivering, not later than 3:00 p.m. (New York City time) one (1) Business Day after the date of such Accepting Lender’s receipt of notice from the Administrative Agent regarding such additional prepayment, a written notice, that such Accepting Lender’s ratable portion of such Declined Prepayment Amount not be applied to repay such Accepting Lender’s Loans, in which case the portion of such Declined Prepayment Amount which would otherwise have been applied to such Loans of the Declining Lenders shall instead be retained by the Borrower. Each Lender’s ratable portion of such Declined Prepayment Amount (unless declined by the respective Lender as described in the preceding sentence) shall be applied to the respective Loans of such Lenders.
Section 2.15 General Provisions Regarding Payments.
(a) All payments by the Borrower of principal, interest, fees and other Obligations shall be made in Dollars in same day funds, without defense, setoff or counterclaim, free of any restriction or condition, and delivered to the Administrative Agent not later than 12:00 noon (New York City time) on the date due at the Principal Office designated by the Administrative Agent for the account of Lenders. For purposes of computing interest and fees, funds received by the Administrative Agent after that time on such due date shall be deemed to have been paid by the Borrower on the next succeeding Business Day.
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(b) All payments in respect of the principal amount of any Loan shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid, and all such payments (and, in any event, any payments in respect of any Loan on a date when interest is due and payable with respect to such Loan) shall be applied to the payment of interest then due and payable before application to principal.
(c) The Administrative Agent (or its agent or sub-agent appointed by it) shall promptly distribute to each Lender at such address as such Lender shall indicate in writing, such Lender’s applicable Pro Rata Share of all payments and prepayments of principal and interest due hereunder (with respect to mandatory prepayments, subject to Section 2.14(c)), together with all other amounts due thereto, including all fees payable with respect thereto, to the extent received by the Administrative Agent.
(d) [Reserved].
(e) Whenever any payment to be made hereunder with respect to any Loan shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder or of the Commitment fees hereunder.
(f) The Borrower hereby authorizes the Administrative Agent to charge the Borrower’s accounts with the Administrative Agent in order to cause timely payment to be made to the Administrative Agent of all principal, interest, fees and expenses due hereunder (subject to sufficient funds being available in its accounts for that purpose).
(g) The Administrative Agent may deem any payment by or on behalf of the Borrower hereunder that is not made in same day funds prior to 12:00 noon (New York City time) to be a non-conforming payment. Any such payment shall not be deemed to have been received by the Administrative Agent until the later of (i) the time such funds become available funds, and (ii) the applicable next Business Day. The Administrative Agent shall give prompt written notice to the Borrower and each applicable Lender if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 6.01(a). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) at the Default Rate from the date such amount was due and payable until the date such amount is paid in full.
(h) If an Event of Default shall have occurred and not otherwise been waived, and the maturity of the Obligations shall have been accelerated pursuant to Section 6.01, all payments or proceeds received by Agents hereunder in respect of any of the Obligations, shall be applied in accordance with the application arrangements described in the Security Agreement.
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(i) Erroneous Payments.
(A) If the Administrative Agent notifies a Lender or other Secured Party, or any Person who has received funds on behalf of a Lender or other Secured Party (any such Lender, other Secured Party or other recipient and their respective successors and assigns, a “Payment Recipient”), that the Administrative Agent has determined in its sole discretion that any funds received by such Payment Recipient from the Administrative Agent or any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Lender, other Secured Party or other Payment Recipient on its behalf) (any such funds, whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of the Administrative Agent and held in trust for the benefit of the Administrative Agent, and such Lender or other Secured Party shall (or, with respect to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to) promptly, but in no event later than two (2) Business Days thereafter, return to the Administrative Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Administrative Agent in same day funds at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of the Administrative Agent to any Payment Recipient under this Section 2.15(i) shall be conclusive, absent manifest error.
(B) Without limiting the immediately preceding Section 2.15(i)(A), each Payment Recipient hereby further agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from the Administrative Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment (a “Payment Notice”), (y) that was not preceded or accompanied by a Payment Notice, or (z) that such Payment Recipient otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part) in each case, then (1) in the case of immediately preceding clauses (x) or (y), an error shall be presumed to have been made (absent written confirmation from the Agent to the contrary) or (2) an error has been made (in the case of immediately preceding clause (z)), in each case, with respect to such payment, prepayment or repayment, and (3) such Payment Recipient shall use commercially reasonable efforts to (and shall use commercially reasonable efforts to cause any other recipient that receives funds on its respective behalf to) promptly (and, in all events, within one Business Day of its knowledge of the occurrence of any of the circumstances described in immediately preceding clauses (x), (y) and (z)) notify the Administrative Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying the Administrative Agent pursuant to this Section 2.15.
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To avoid doubt, failure to deliver a notice to the Administrative Agent pursuant to this Section 2.15 shall not have any effect on a Payment Recipient’s obligations pursuant to this Section 2.15 or on whether or not an Erroneous Payment has been made.
(C) Each Lender and Secured Party hereby authorizes the Administrative Agent to set off, net and apply any and all amounts at any time owing to such Lender or Secured Party under any Facility Document, or otherwise payable or distributable by the Administrative Agent to such Lender or Secured Party from any source, against any amount due to the Administrative Agent under Section 2.15(i)(A) above or under the indemnification provisions of this Agreement.
(D) If an Erroneous Payment (or portion thereof) is not recovered by the Administrative Agent for any reason, after demand therefor in accordance with Section 2.15(i)(A), from any Payment Recipient that has received such Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion thereof) on its respective behalf) (such unrecovered amount, an “Erroneous Payment Return Deficiency”), upon the Administrative Agent’s notice to such Lender at any time, then effective immediately (with the consideration therefor being acknowledged by the parties hereto), (A) such Lender shall be deemed to have assigned its Loans (but not its Commitments) with respect to which such Erroneous Payment was made (the “Erroneous Payment Impacted Class”) in an amount equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Administrative Agent may specify) (such assignment of the Loans (but not Commitments) of the Erroneous Payment Impacted Class, the “Erroneous Payment Deficiency Assignment”) (on a cashless basis and such amount calculated) at par plus any accrued and unpaid interest (with the assignment fee to be waived by the Administrative Agent in such instance), and is hereby (together with the Borrower) deemed to execute and deliver an Assignment Agreement with respect to such Erroneous Payment Deficiency Assignment, and such Lender shall deliver any Notes evidencing such Loans to the Borrowers or the Administrative Agent (but the failure of such Person to deliver any such Notes shall not affect the effectiveness of the foregoing assignment), (B) the Administrative Agent as the assignee Lender shall be deemed to have acquired the Erroneous Payment Deficiency Assignment, (C) upon such deemed acquisition, the Administrative Agent as the assignee Lender shall become a Lender, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Lender shall cease to be a Lender, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable Commitments which shall survive as to such assigning Lender, and (D) the Administrative Agent will reflect in the Register its ownership interest in the Loans subject to the Erroneous Payment Deficiency Assignment. For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the Commitments of any Lender and such Commitments shall remain available in accordance with the terms of this Agreement.
(E) Subject to Section 9.05, the Administrative Agent may, in its discretion, sell any Loans acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Lender shall be reduced by the net proceeds of the sale of such Loan (or portion thereof), and the Administrative Agent shall retain all other rights, remedies and claims against such Lender (and/or against any recipient that receives funds on its respective behalf). In addition, an Erroneous Payment Return Deficiency owing by the applicable Lender (x) shall be reduced by the proceeds of prepayments or repayments of principal and interest, or other distribution in respect of principal and interest, received by the Administrative Agent on or with respect to any such Loans acquired from such Lender pursuant to an Erroneous Payment Deficiency Assignment (to the extent that any such Loans are then owned by the Administrative Agent) and (y) may, in the sole discretion of the Administrative Agent, be reduced by any amount specified by the Administrative Agent in writing to the applicable Lender from time to time.
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(F) The Borrower and each other Loan Party hereby agree that (x) in the event an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, the Administrative Agent shall be contractually subrogated (irrespective of whether the Administrative Agent may be equitably subrogated) to all the rights of such Lender or other Secured Party under the Facility Documents with respect to such amount, (y) an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrower or any other Loan Party, except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Administrative Agent from the Borrower or any other Loan Party for the purpose of making such Erroneous Payment, and (z) to the extent that an Erroneous Payment was in any way or at any time credited as a payment or satisfaction of any of the Obligations, the Obligations or part thereof that were so credited, and all rights of the applicable Lender, other Secured Party or Administrative Agent, as the case may be, shall be reinstated and continue in full force and effect as if such payment or satisfaction had never been received; provided, however, the amount of such Erroneous Payment that is comprised of funds received by the Administrative Agent from the Borrower or any other Loan Party for the purpose of making such Erroneous Payment shall be credited as a payment or satisfaction of the Obligations and the Obligations or part thereof that were so credited shall not be reinstated.
(G) To the extent permitted by applicable requirements of law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Agent for the return of any Erroneous Payment received, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine.
(H) Each party’s obligations, agreements and waivers under this Section 2.15(i) shall survive the resignation or replacement of the Administrative Agent or any transfer of rights or obligations by, or the replacement of, a Lender or other Secured Party, the termination of any Commitment or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Facility Document.
(I) Notwithstanding anything to the contrary in this Section 2.15(i), the Loan Parties shall have no obligations, liabilities or responsibilities for any actions, consequences or remediation (including the repayment or recovery of any amounts) contemplated by this Section 2.15(i) (and, for the avoidance of doubt, it is understood and agreed that if a Loan Party has paid principal, interest or any other amounts owed pursuant to a Facility Document, nothing in this Section 2.15(i) (or any equivalent provision) shall require any such Loan Party to pay additional amounts that are duplicative of such previously paid amounts).
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Section 2.16 Ratable Sharing. Lenders hereby agree among themselves, that if any of them shall, whether by voluntary payment (other than a voluntary prepayment of Loans made and applied in accordance with the terms hereof), through the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or by the enforcement of any right under the Facility Documents or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a proportion of any amount of principal, interest, fees and other amounts then due and owing to such Lender hereunder or under the other Facility Documents (collectively, the “Amounts Due” to such Lender) which is greater than the proportion received by any other Lender entitled to payment thereof in respect of such Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (a) notify the Administrative Agent and each other Lender of the receipt of such payment and (b) apply a portion of such payment to purchase participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such payment) in the Amounts Due to the other Lenders entitled to payment thereof so that all such recoveries of Amounts Due shall be shared by all Lenders in proportion to the Amounts Due to them; provided that if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of the Borrower or otherwise, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest. The Borrower expressly consents to the foregoing arrangement and agrees that any holder of a participation so purchased may exercise any and all rights of banker’s lien, set-off or counterclaim with respect to any and all monies owing by the Borrower to that holder with respect thereto as fully as if that holder were owed the amount of the participation held by that holder. The provisions of this Section 2.16 shall not be construed to apply to (a) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or (b) any payment obtained by any Lender as consideration for the assignment or sale of a participation in any of its Loans or other Obligations owed to it in accordance with the express terms of this Agreement.
Section 2.17 [Reserved].
Section 2.18 Increased Costs; Capital Adequacy.
(a) Compensation For Increased Costs and Taxes. In the event that any Lender shall determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any Change in Law (i) imposes, modifies or holds applicable any reserve (including any marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, FDIC insurance or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender or (ii) imposes any other condition or Tax (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of “Excluded Taxes” and (C) Connection Income Taxes) on or affecting such Lender (or its applicable lending office) or its obligations hereunder or the London interbank market; and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining Loans hereunder or to reduce any amount received or receivable by such Lender (or its applicable lending office) with respect thereto; then, in any such case, the Borrower shall promptly pay to such Lender, upon receipt of the statement referred to in the next sentence, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as may be necessary to compensate such Lender for any such increased cost or reduction in amounts received or receivable hereunder. Such Lender shall deliver to the Borrower (with a copy to the Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Lender under this Section 2.18(a), which statement shall be conclusive and binding upon all parties hereto absent manifest error.
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(b) Capital Adequacy Adjustment. In the event that any Lender shall have determined that a Change in Law has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender’s Loans or Commitment or other obligations hereunder with respect to the Loans, to a level below that which such Lender or such controlling corporation could have achieved but for such Change in Law (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within five (5) Business Days after receipt by the Borrower from such Lender of the statement referred to in the next sentence, the Borrower shall pay to such Lender such additional amount or amounts as shall compensate such Lender or such controlling corporation on an after tax basis for such reduction. Such Lender shall deliver to the Borrower (with a copy to the Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to Lender under this Section 2.18(b), which statement shall be conclusive and binding upon all parties hereto absent manifest error.
Section 2.19 Taxes; Withholding, Etc.
(a) Payments to Be Free and Clear. All sums payable by or on account of any obligation of any Loan Party hereunder or under any other Facility Document shall (except to the extent required by applicable Law) be paid free and clear of, and without any deduction or withholding for or on account of, any Tax.
(b) Withholding of Taxes. If any applicable Loan Party or any other applicable withholding agent is required by applicable Law to make any deduction or withholding for or on account of any Tax from any sum paid or payable under any of the Facility Documents, then: (i) the Borrower shall notify the Administrative Agent of any such requirement or any change in any such requirement as soon as the Borrower becomes aware of it; (ii) the Borrower shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law, such payment to be made (if the liability to pay is imposed on any Loan Party) for its own account or (if that liability is imposed on the Administrative Agent or such Lender, as the case may be) on behalf of and in the name of the Administrative Agent or such Lender; (iii) if such deduction or withholding is made on account of any Indemnified Tax, the sum payable by such Loan Party in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after such deduction, withholding or payment has been made (including such deductions, withholdings, or payments applicable to additional sums payable under this Section 2.19), the Administrative Agent or such Lender, as the case may be, receives on the due date a net sum equal to the amount it would have received had no such deduction, withholding or payment been required or made; and (iv) within thirty (30) days after any payment of any Tax by the Borrower pursuant to clause (ii), the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by the relevant Governmental Authority evidencing such payment, a copy of the return reporting such payment, or other evidence satisfactory to the Administrative Agent of such deduction, withholding or payment and of the remittance thereof to the relevant Governmental Authority.
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(c) Evidence of Exemption From U.S. Withholding Tax.
(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Facility Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution, and submission of such documentation (other than such documentation set forth in paragraph (A) of Section 2.19(c)(ii), Section 2.19(c)(iii), or Section 2.19(c)(iv)) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(ii) Without limiting the generality of paragraph (i), each Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Administrative Agent for transmission to the Borrower, on or prior to the Closing Date (in the case of each Lender listed on the signature pages hereof on the Closing Date) or on or prior to the date of the Assignment Agreement pursuant to which it becomes a Lender (in the case of each other Lender), and, upon request, at such other times as may be necessary in the determination of the Borrower or the Administrative Agent (each in the reasonable exercise of its discretion), (A) whichever of the following is applicable: (1) in the case of such Foreign Lender (or, if such Foreign Lender is disregarded as an entity separate from its owner for U.S. federal income tax purposes, such owner) claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Facility Document, two (2) executed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, United States federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Facility Document, Internal Revenue Service Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, United States federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty; (2) two (2) executed copies of Internal Revenue Service Form W-8ECI with respect to such Foreign Lender (or, if such Foreign Lender is disregarded as an entity separate from its owner for U.S. federal income tax purposes, such owner); (3) in the case of such Foreign Lender (or, if such Foreign Lender is disregarded as an entity separate from its owner for U.S. federal income tax purposes, such owner) claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a Certificate re Non-Bank Status and (y) two (2) executed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E (or any successor form); or (4) to the extent such Foreign Lender (or, if such Foreign Lender is disregarded as an entity separate from its owner for U.S. federal income tax purposes, such owner) is not the beneficial owner, two (2) executed copies of Internal Revenue Service Form W-8IMY, accompanied by Internal Revenue Service Form W-8ECI, W-BEN, W-8BEN-E, a Certificate re Non-Bank Status, Internal Revenue Service Form W-9, or other certification documents from each beneficial owner, as applicable; provided that if such Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a Certificate re Non-Bank Status on behalf of each such direct and indirect partner; and (B) executed copies of any other form required under the Code and reasonably requested by the Borrower to establish that such Lender is not subject to (or is subject to a reduced rate of) deduction or withholding of United States federal withholding tax with respect to any payments to such Lender of interest payable under any of the Facility Documents.
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(iii) Without limiting the generality of paragraph (i), each Lender that is a U.S. Person (or, if such Lender is disregarded as an entity separate from its owner for U.S. federal income tax purposes, is owned by a U.S. Person) (such Lender or such owner, as applicable, a “U.S. Lender”) shall deliver to the Administrative Agent and the Borrower on or prior to the Closing Date (or, if later, on or prior to the date on which such Lender becomes a party to this Agreement) two (2) executed copies of Internal Revenue Service Form W-9 (or any successor form), properly completed and duly executed by such Lender, certifying that such U.S. Lender is entitled to an exemption from United States federal backup withholding tax, or otherwise prove that it is entitled to such an exemption.
(iv) FATCA. If a payment made to a Recipient under any Facility Document would be subject to United States federal withholding Tax imposed by FATCA if such Recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Recipient shall deliver to the Borrower and Administrative Agent, at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower or Administrative Agent, such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or Administrative Agent as may be necessary for the Borrower or Administrative Agent to comply with its obligations under FATCA and to determine that such Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes of this paragraph (iv), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(v) Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any material respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
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(vi) If the Administrative Agent is a U.S. Person (or if the Administrative Agent is disregarded as an entity separate from its owner for U.S. federal income tax purposes and such owner is a U.S. Person), it (or such owner, as applicable) shall deliver to the Borrower on or prior to the date on which the Administrative Agent becomes the Administrative Agent under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower) two (2) executed copies of Internal Revenue Service Form W-9 certifying that the Administrative Agent (or such owner, as applicable) is entitled to an exemption from U.S. federal backup withholding Tax. If the Administrative Agent is not a U.S. Person (or if the Administrative Agent is disregarded as an entity separate from its owner for U.S. federal income tax purposes and such owner is not a U.S. Person), it (or such owner, as applicable) shall provide to the Borrower on or prior to the date on which the Administrative Agent becomes the Administrative Agent under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower): (A) with respect to payments received for the Administrative Agent’s own account, two (2) executed copies of Internal Revenue Service Form W-8ECI with respect the Administrative Agent (or such owner, as applicable), and (B) with respect to payments received on account of any Lender, two (2) executed copies of Internal Revenue Service Form W-8IMY certifying that the Administrative Agent (or such owner, as applicable) is either (x) a “U.S. branch” and that the payments it receives for the account of others are not effectively connected with the conduct of its trade or business within the United States and that it is using such form as evidence of its agreement with the Borrower to be treated as a “U.S. person” with respect to such payments (and the Borrower and the Administrative Agent agree to so treat the Administrative Agent (or such owner, as applicable) as a “U.S. person” with respect to such payments as contemplated by Section 1.1441-1(b)(2)(iv) of the Treasury regulations) or (y) a “qualified intermediary” assuming primary withholding responsibility under Chapters 3 and 4 of the Code and/or primary IRS Form 1099 reporting and backup withholding responsibility for payments it receives for the account of others.
(d) Payment of Other Taxes. Without limiting the provisions of or duplicating any amounts payable pursuant to Section 2.19(b), the Borrower shall timely pay all Other Taxes to the relevant Governmental Authorities in accordance with applicable Law (or, at the option of the Administrative Agent, timely reimburse it for the payment of any Other Taxes). The Borrower shall deliver to the Administrative Agent official receipts or other evidence of such payment reasonably satisfactory to the Administrative Agent in respect of any Other Taxes payable hereunder promptly after payment of such Other Taxes.
(e) Indemnified Taxes. Without limiting the provisions of or duplicating any amounts payable pursuant to Sections 2.19(b) or 2.19(d), the Borrower shall indemnify the Administrative Agent and any Lender for the full amount of Indemnified Taxes (including any such Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.19) paid or payable by the Administrative Agent or any Lender or any of their respective Affiliates or required to be withheld or deducted from a payment to the Administrative Agent or any Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability (with supporting documentation as necessary) delivered to the Borrower shall be conclusive absent manifest error. Such payment shall be due within ten (10) days after demand therefor.
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(f) Repayment. If the Borrower pays any additional amounts or makes an indemnity payment under this Section 2.19 to any Lender or the Administrative Agent, and such Lender or the Administrative Agent determines in its sole discretion exercised in good faith that it has actually received in connection therewith any refund of the underlying Indemnified Taxes, such Lender or the Administrative Agent shall pay to the Borrower an amount equal to such refund which was obtained by such Lender or Administrative Agent (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.19 with respect to the Indemnified Taxes giving rise to such refund) reduced by all reasonable out-of-pocket expenses (including Taxes) of such Lender or the Administrative Agent, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, however, that the Borrower, upon the request of such Lender or the Administrative Agent, shall repay the amount paid over to the Borrower to any Lender or the Administrative Agent in the event any Lender or the Administrative Agent is required to repay such refund, plus any interest, penalties or other charges. Notwithstanding anything to the contrary in this paragraph (f), in no event will any Lender or the Administrative Agent be required to pay any amount to the Borrower pursuant to this paragraph (f) the payment of which would place any Lender or the Administrative Agent in a less favorable net after-Tax position than such Lender or the Administrative Agent would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any Lender or the Administrative Agent to disclose any Confidential Information to the Borrower or any other Person (including its Tax returns).
(g) Survival. Each party’s obligations under this Section 2.19 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Facility Document.
Section 2.20 Obligation to Mitigate. Each Lender agrees that, as promptly as practicable after the officer of such Lender responsible for administering its Loans becomes aware of the occurrence of an event or the existence of a condition that would entitle such Lender to receive payments under Sections 2.18 or 2.19, it shall, to the extent not inconsistent with the internal policies of such Lender and any applicable legal or regulatory restrictions, use reasonable efforts to (a) make, issue, fund or maintain its Loans through another office of such Lender or (b) take such other measures as such Lender may deem reasonable, if as a result thereof the additional amounts which would otherwise be required to be paid to such Lender pursuant to Sections 2.18 or 2.19 would be materially reduced and if, as determined by such Lender in its sole discretion, the making, issuing, funding or maintaining of such Commitments or Loans through such other office or in accordance with such other measures, as the case may be, would not otherwise adversely affect such Commitments or Loans or the interests of such Lender; provided that such Lender shall not be obligated to utilize such other office pursuant to this Section 2.20 unless the Borrower agrees to pay all incremental expenses incurred by such Lender as a result of utilizing such other office as described above. A certificate as to the amount of any such expenses payable by the Borrower pursuant to this Section 2.20 (setting forth in reasonable detail the basis for requesting such amount) submitted by such Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive absent manifest error.
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Article III
CONDITIONS PRECEDENT
Section 3.01 Conditions to Closing Date. The effectiveness of this Agreement and the obligations of the Lenders to make Loans hereunder shall not become effective until the date on which each of the following conditions shall be satisfied (or waived in accordance with the terms hereof):
(a) The Administrative Agent shall have signed this Agreement, the Security Agreement, the Pledge Agreement, and the Intercreditor Agreement and shall have received from each other Person that is to be a party thereto on the Closing Date a counterpart signed by such Person of this Agreement, the Security Agreement, the Pledge Agreement, and the Intercreditor Agreement. The Administrative Agent shall have received copies of UCC-1 financing statements with respect to each Loan Party, to be filed on the Closing Date in the appropriate filing offices.
(b) The Administrative Agent shall have received a favorable written opinion in form and substance satisfactory to the Administrative Agent (addressed to the Administrative Agent and the Lenders and dated the Closing Date) of (i) Kirkland & Ellis LLP, counsel for the Borrower and (ii) local counsel in each jurisdiction in which a Loan Party is organized and the laws of which are not covered by the opinion referred to in clause (i) above.
(c) The Administrative Agent shall have received, in respect of each Loan Party, a certificate of such Loan Party, dated the Closing Date and executed by a secretary, an assistant secretary or other Authorized Officer of such Loan Party, attaching and certifying (i) a copy of the articles or certificate of incorporation, formation or organization or other comparable organizational document of such Loan Party, which shall be certified by the appropriate Governmental Authority, (ii) a copy of the bylaws or operating, management, partnership or similar agreement of such Loan Party, as applicable, together with all amendments thereto as of the Closing Date, (iii) signature and incumbency certificates of the officers of, or other authorized persons acting on behalf of, such Loan Party executing each Facility Document, (iv) resolutions or written consent, as applicable, of the board of directors or similar governing body of such Loan Party approving and authorizing the execution, delivery and performance of this Agreement and the other Facility Documents to which it is a party, and (v) a good standing certificate (or equivalent) from the applicable Governmental Authority of such Loan Party’s jurisdiction of organization, dated the Closing Date or a recent date prior thereto, all in form and substance reasonably satisfactory to the Administrative Agent.
(d) The Administrative Agent shall have received a certificate, dated the Closing Date and signed by an Authorized Officer of the Borrower, certifying that (i) the representations and warranties of the Loan Parties set forth in the Facility Documents are true and correct in all material respects (or, in the case of any such representation or warranty under the Facility Documents already qualified as to materiality, in all respects) on and as of the Closing Date (except in the case of any such representation and warranty that expressly relates to a prior date, in which case such representation and warranty shall only be certified to be so true and correct in all material respects on and as of such prior date) and (ii) on the Closing Date, no Default or Event of Default shall have occurred and be continuing.
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(e) The Agents, the Lenders and the members of the Ad Hoc Group (or, as applicable, their counsel and other advisors) shall have received (i) payment of all fees and other amounts due and payable by the Borrower or any of its Subsidiaries on or prior to the Closing Date pursuant to this Agreement or any commitment letter or fee letter entered into in connection herewith, and (ii) to the extent invoiced at least one Business Day before the Closing Date, payment or reimbursement of all reasonable out-of-pocket expenses, including the fees and expenses of counsel to the Agent and the Lenders, required to be paid or reimbursed by the Borrower or any of its Subsidiaries in accordance with this Agreement or any other agreement entered in connection with or further to the Transactions.
(f) The Administrative Agent shall have received, at least two (2) Business Days prior to the Closing Date, (i) all documentation and other information required by regulatory authorities with respect to the Loan Parties under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, and (ii) to the extent any Loan Party qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, a Beneficial Ownership Certification in relation to such Loan Party, in each case, that has been reasonably requested by any Lender in writing at least five (5) Business Days prior to the Closing Date.
(g) Holders of not less than 66 2/3% the aggregate outstanding principal amount of Existing Notes (prior to giving effect to the Exchange) shall have consented to the Existing Notes Supplemental Indenture and the Existing Notes Supplemental Indenture shall have become effective. The Exchange shall have or shall substantially simultaneously occur.
(h) The Borrower and/or its applicable Subsidiaries shall have entered into a New Canadian Receivables SPV with aggregate commitments of at least CAD 100 million and such New Canadian Receivables SPV shall have become effective substantially concurrently with the Closing Date.
(i) Loan SPV shall have issued the Backstop Notes and shall have received proceeds thereof in an aggregate amount of at least $[***].
(j) The Borrower and/or its applicable Subsidiaries shall have entered into waivers or amendments with respect to each of the Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility (which waivers or amendments are in form and substance satisfactory to the Lenders) and all such waivers or amendments shall have become effective.
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(k) The Borrower shall have delivered to the Administrative Agent a solvency certificate in form and substance satisfactory to the Lenders and demonstrating that the Borrower is, together with its Subsidiaries, Solvent.
(l) The Borrower shall have delivered to the Administrative Agent the Historical Financial Statements.
(m) The Borrower shall have delivered to the Administrative Agent a 13-week cash flow projection for the Borrower and its Subsidiaries in form and substance, satisfactory to the Required Ad Hoc Group Lenders (the “Closing Date Projections”).
(n) In order to evidence a continuing valid, perfected first priority security interest in the Collateral in favor of the Collateral Agent, for the benefit of the Secured Parties, each Loan Party shall have delivered to the Collateral Agent:
(i) evidence satisfactory to the Collateral Agent of the compliance by each Loan Party of its obligations under the Security Agreement and the other Collateral Documents (including its obligations to execute and deliver UCC financing statements, intellectual property security agreements and originals of stock certificates in respect of Equity Interests (along with corresponding stock powers) and promissory notes in respect of pledged debt (along with allonges)); and
(ii) evidence that each Loan Party shall have taken or caused to be taken any other action, executed and delivered or caused to be executed and delivered any other agreement, document and instrument in a proper form for filing, if applicable, reasonably required by the Collateral Agent.
(o) The Administrative Agent shall have received a customary, executed payoff letter with respect to the Bay Coast Revolving Credit Facility in form reasonably satisfactory to it, and the Bay Coast Revolving Credit Facility shall be terminated (and all Guarantees and Liens relating thereto released) substantially concurrently with the occurrence of the Closing Date.
The Administrative Agent shall notify the Loan Parties and the Lenders of the Closing Date, and such notice shall be conclusive and binding.
Section 3.02 Conditions to Making of Loans. The obligation of each Lender to make any Loan, on the Closing Date, is subject to the fulfillment or waiver of each of the following conditions precedent:
(a) Each of the representations and warranties of the Loan Parties set forth in the Facility Documents are true and correct in all material respects (or, in the case of any such representation or warranty under the Facility Documents already qualified as to materiality, in all respects) on and as of the Closing Date (except in the case of any such representation and warranty that expressly relates to a prior date, in which case such representation and warranty shall only be certified to be so true and correct in all material respects on and as of such prior date).
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(b) No event shall have occurred, or would result from the making of the Loans on the Closing Date or from the application of the proceeds therefrom, which constitutes a Default or an Event of Default.
(c) The Administrative Agent shall have received a Borrowing Request in accordance with the requirements hereof.
The borrowing of the Loans on the Closing Date shall be deemed to constitute a representation and warranty by the Loan Parties on the date thereof that the conditions set forth in paragraphs (a) and (b) of this Section 3.02 have been satisfied.
Article IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Loan Parties’ Representations and Warranties. The Loan Parties represent and warrant as follows:
(a) Organization; Requisite Power and Authority; Qualification. Each of the Borrower and its Subsidiaries (i) is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization as identified on Schedule 4.01(a), (ii) 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 enter into the Facility Documents to which it is a party and to carry out the Transactions contemplated thereby and (iii) is qualified to do business and in good standing in every jurisdiction where any material portion of its assets are located and wherever necessary to carry out its material business and operations, except in the case of subclause (iii), where the failure to be so qualified or so to be in good standing could not reasonably be expected to have a Material Adverse Effect.
(b) Equity Interests and Ownership. The Equity Interests of each of the Borrower and its Subsidiaries have been duly authorized and validly issued and are fully paid and non-assessable. Except as set forth on Schedule 4.01(b), as of the Closing Date, there is no existing option, warrant, call, right, commitment or other agreement to which the Borrower or any of its Subsidiaries is a party requiring, and there is no membership interest or other Equity Interests of the Borrower or any of its Subsidiaries outstanding which upon conversion or exchange would require, the issuance by the Borrower or any of its Subsidiaries of any additional membership interests or other Equity Interests of the Borrower or any of its Subsidiaries or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, a membership interest or other Equity Interests of the Borrower or any of its Subsidiaries. Schedule 4.01(b) correctly sets forth the ownership interest of the Borrower and each of its Subsidiaries in their respective Subsidiaries as of the Closing Date.
(c) Due Authorization. The execution, delivery and performance of the Facility Documents have been duly authorized by all necessary action on the part of each Loan Party that is a party thereto.
(d) No Conflict. The execution, delivery and performance by the Loan Parties of the Facility Documents to which they are parties and the consummation of the Transactions do not and will not (i) violate (A) any provision of any Law or any governmental rule or regulation applicable to any such Loan Party, (B) any of the Organizational Documents of any Loan Party or (C) any order, judgment or decree of any court or other agency of government binding on such Loan Party; (ii) result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of such Loan Party; (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of such Loan Party (other than any Liens created under any of the Facility Documents in favor of the Collateral Agent on behalf of the Secured Parties); or (iv) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of any Loan Party, except for such approvals or consents which have been obtained on or before the Closing Date and disclosed in writing to the Lenders.
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(e) Governmental Consents. The execution, delivery and performance by each Loan Party of the Facility Documents to which it is a party and the consummation of the transactions contemplated by the Facility Documents do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Collateral Agent for filing and/or recordation, as of the Closing Date or such later date as is permitted under this Agreement or the other Facility Documents.
(f) Binding Obligation. Each Facility Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.
(g) Historical Financial Statements; Closing Date Projections. The Historical 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 date 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 changes resulting from audit and normal year-end adjustments. The Closing Date Projections were prepared in good faith and based upon assumptions which, in light of the circumstances under which they were made, were, and continue to be as of the Closing Date, reasonable and reflect the best available estimates and judgments of the Borrower’s senior management as to the expected future performance of the Borrower and its Subsidiaries as of Closing Date
(h) No Material Adverse Change. Since December 31, 2022, no event, circumstance or change has occurred that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect.
(i) Adverse Proceedings, Etc. There are no Adverse Proceedings, individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries (i) is in violation of any applicable Laws (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or (ii) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
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(j) Payment of Taxes. All income and other material Tax returns and reports of the Borrower and its Subsidiaries required to be filed by any of them have been timely filed. All Taxes due and payable and all assessments, fees, Taxes and other governmental charges upon the Borrower 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 for Taxes (i) that are being actively contested by the Borrower or such Subsidiary in good faith and by appropriate proceedings and (ii) where such failure to pay is not adverse in any material respect to the Lenders; provided, in each case, that such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.
(k) Properties. The Borrower and each of its Subsidiaries has (A) good, sufficient and legal title to (in the case of fee interests in real property), (B) valid leasehold interests in (in the case of leasehold interests in real or personal property), (C) valid licensed rights in (in the case of licensed interests in intellectual property) and (D) good title to (in the case of all other personal property), all of their respective properties and assets reflected in the Historical Financial Statements referred to in Section 4.01(g) and in the most recent financial statements delivered pursuant to Section 5.01, in each case except for assets disposed of since the date of such financial statements in the ordinary course of business. Except as permitted by this Agreement, all such properties and assets are free and clear of Liens.
(l) Environmental Matters. In each case, except to the extent not reasonably likely to result in a Material Adverse Effect, (i) the Borrower and each of its Subsidiaries is in compliance with all applicable Environmental Laws, and any past noncompliance has been fully resolved without any pending, on-going or future obligation or cost; (ii) the Borrower and each of its Subsidiaries has obtained and maintained in full force and effect all Governmental Authorizations required pursuant to Environmental Laws for the operation of their respective business; (iii) to the Borrower and each Subsidiary’s knowledge, there are and have been no conditions, occurrences, violations of Environmental Law, or presence or Releases of Hazardous Material which could reasonably be expected to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries; (iv) there are no pending Environmental Claims against the Borrower or any of its Subsidiaries, and neither the Borrower nor any of its Subsidiaries has received any written notification of any alleged violation of, or liability pursuant to, Environmental Law or responsibility for the Release or threatened Release of, or exposure to, any Hazardous Materials; and (v) no Lien imposed pursuant to any Environmental Law has attached to any Collateral and, to the knowledge of any Loan Party, no conditions exist that would reasonably be expected to result in the imposition of such a Lien on any Collateral.
(m) No Defaults. Neither the Borrower nor any of its Subsidiaries is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any of its Contractual Obligations, and no condition exists which, with the giving of notice or the lapse of time or both, could constitute such a default, except where the consequences, direct or indirect, of such default or defaults, if any, could not reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing.
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(n) Governmental Regulation. Neither the Borrower nor any of its Subsidiaries is 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.
(o) Margin Stock. Neither the Borrower nor any of its Subsidiaries owns any Margin Stock.
(p) Employee Benefit Plans. No ERISA Event has occurred or is reasonably expected to occur that would result in a Material Adverse Effect.
(q) Solvency. The Loan Parties, taken as a whole, are, and on any date on which this representation and warranty is made, shall be, Solvent.
(r) Compliance with Statutes, Etc. The Borrower and each of its Subsidiaries is in compliance with all applicable 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 assets and property (including compliance with all applicable Environmental Laws), except such non-compliance that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
(s) Disclosure. The representations and warranties of the Loan Parties contained in the Facility Documents and in the other documents, certificates or written statements furnished to the Lenders by or on behalf of the Borrower and its Subsidiaries for use in connection with the Transactions contemplated hereby, in each case, as modified or supplemented by other information so furnished, when taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact (known to the Borrower and its Subsidiaries, in the case of any document not furnished by them) necessary in order to make the statements contained therein not misleading in light of the circumstances under which the same were made; provided that, with respect to projected financial information, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed by them to be reasonable at the time delivered, it being understood that any such projected financial information may vary from actual results and such variations could be material.
(t) PATRIOT Act. To the extent applicable, each Loan Party is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the PATRIOT Act. No part of the proceeds of the Loans shall 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 anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
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(u) Collateral. All Obligations are secured by the Collateral under the Collateral Documents and entitled to a senior secured position with respect to such Collateral thereunder in accordance with the terms thereof.
Article V
COVENANTS
So long as any Commitment is in effect and any Obligation (other than Additional Secured Obligations and contingent indemnification and expense reimbursement obligations not then due) hereunder remains unpaid:
Section 5.01 Financial Statements and Other Reports. In the case of the Borrower, the Borrower shall deliver to the Administrative Agent (which shall furnish to each Lender):
(a) Quarterly Financial Statements. As soon as available, and in any event within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, the consolidated balance sheets of the Borrower and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated statements of operations, income, changes in stockholders’ equity and cash flows of the Borrower 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, all in reasonable detail, which consolidated balance sheets and related consolidated statements of operations, income, changes in stockholders’ equity and cash flows shall be accompanied by customary management’s discussion and analysis, together with a Financial Officer Certification; provided that the delivery by the Borrower of quarterly reports on Form 10-Q shall satisfy the requirements of this Section 5.01(a) to the extent such quarterly reports include the information specified herein (it being understood that any such financials statements that are publicly accessible through the website of the Borrower or the website of the SEC will be deemed to be provided in accordance with this Section 5.01(a));
(b) Annual Financial Statements. As soon as available, and in any event within 90 days after the end of each Fiscal Year, (i) the audited consolidated balance sheets of the Borrower and its Subsidiaries as at the end of such Fiscal Year and the related audited consolidated statements of operations, income, changes in stockholders’ equity and cash flows of the Borrower and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, in reasonable detail, which consolidated balance sheets and related consolidated statements of operations, income, changes in stockholders’ equity and cash flows shall be accompanied by customary management’s discussion and analysis, together with a Financial Officer Certification; and (ii) with respect to such consolidated financial statements a report thereon of independent certified public accountants of recognized national standing selected by the Borrower, and reasonably satisfactory to the Administrative Agent (which report and/or the accompanying financial statements shall be unqualified (except to the extent (and only to the extent) that a “going concern” qualification or statement relates to the report and opinion accompanying the financial statements for the Fiscal Year ending immediately prior to the Scheduled Maturity Date and which qualification or statement is solely a consequence of such impending Scheduled Maturity Date under this Agreement), and shall state that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of the Borrower 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, with respect to GAAP being applied on a consistent basis, 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); provided that the delivery by the Borrower of annual reports on Form 10-K shall satisfy the requirements of this Section 5.01(b) to the extent such annual reports include the information specified herein (it being understood that any such financials statements that are publicly accessible through the website of the Borrower or the website of the SEC will be deemed to be provided in accordance with this Section 5.01(b));
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(c) Compliance Certificates. (i) Together with each delivery of financial statements of the Borrower and its Subsidiaries pursuant to Section 5.01(a) and (b), a duly executed and completed Compliance Certificate and (ii) within fifteen (15) days after the end of each calendar month (or if such date is not a Business Date, the immediately succeeding Business Day), a duly executed certificate of an Authorized Officer as to whether the Borrower complied with Section 5.26(a) with respect to such calendar month (together with a calculation, consistent with the analogous calculation set forth in a Compliance Certificate, demonstrating such compliance (or lack thereof));
(d) 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 Financial Statements, the consolidated financial statements of the Borrower and its Subsidiaries delivered pursuant to Section 5.01(a) or (b) shall differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one or more statements of reconciliation for all such prior financial statements in form reasonably satisfactory to the Administrative Agent;
(e) Public Reports. Promptly after the same become publicly available, copies of all periodic and other publicly available reports, proxy statements and, to the extent requested by the Administrative Agent, other materials filed by the Borrower or any of its Subsidiaries with the SEC, or distributed to its stockholders generally, as applicable; provided, however, that such reports, proxy statements, filings and other materials required to be delivered pursuant to this clause (e) shall be deemed delivered for purposes of this Agreement when publicly accessible through the website of the Borrower or the website of the SEC;
(f) Notice of Default. Promptly upon any Authorized Officer of any Loan Party obtaining knowledge (A) of any condition or event that constitutes a Default or an Event of Default or that notice has been given to any Loan Party with respect thereto; (B) that any Person has given any notice to any Loan Party or any of its Subsidiaries or taken any other action with respect to any event or condition set forth in Section 6.01(d); or (C) 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 an 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 Event of Default, Default, default, event or condition, and what action the Borrower (or such Subsidiary) has taken, is taking and proposes to take with respect thereto;
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(g) Notice of Litigation. Promptly upon any responsible officer of any Loan Party obtaining actual knowledge of (A) any Adverse Proceeding not previously disclosed in writing by the Borrower to the Lenders or (B) any development in any Adverse Proceeding that, in the case of either clause (A) or (B), if adversely determined 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, or the exercise of rights or performance of obligations under any Facility Document written notice thereof together with such other information as may be reasonably available to the Borrower to enable the Lenders and their counsel to evaluate such matters;
(h) ERISA. (A) With reasonable promptness, upon the occurrence of any ERISA Event which, either alone or together with the occurrence of another ERISA Event or other ERISA Events, is reasonably expected to have a Material Adverse Effect, a written notice specifying the nature thereof, what action such the Borrower, its Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto; and (B) upon request of the Administrative Agent, with reasonable promptness, copies of (1) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by the Borrower, or any of its respective ERISA Affiliates with the Department of Labor with respect to each Pension Plan; (2) all notices received by the Borrower or any of its respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and
(i) Other Information. Promptly, from time to time, (i) such other information regarding the operations, business affairs and financial condition of the Borrower or any of its Subsidiaries, or compliance with the terms of any Facility Document as in each case the Administrative Agent (for itself or on behalf of any Lender) or any member of the Ad Hoc Group may reasonably request, and (ii) information and documentation reasonably requested by any Agent (for itself or on behalf of any Lender) for purposes of compliance with applicable “know your customer” requirements under the USA PATRIOT Act or other applicable anti-money laundering laws.
Section 5.02 Lender Calls. The Borrower agrees that it will use commercially reasonable efforts to hold and participate in quarterly conference calls with Lenders and securities analysts to discuss the financial information delivered pursuant to Section 5.01(a) and (b) not later than ten (10) Business Days after distribution of such financial information (it being understood that such quarterly conference calls may be the same conference calls as with the Borrower’s equity investors and analysts).
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Section 5.03 Information Regarding Collateral.
(a) [Reserved;]
(b) The Borrower shall furnish to the Collateral Agent prompt written notice of any change (1) in any Loan Party’s corporate name, (2) in any Loan Party’s identity or corporate structure, (3) in any Loan Party’s jurisdiction of organization or (4) in any Loan Party’s Federal Taxpayer Identification Number or state organizational identification number. Each Loan Party agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral as contemplated in the Collateral Documents; and
(c) Each Loan Party also agrees promptly to notify (or to have the Borrower notify on its behalf) the Collateral Agent if any material portion of the Collateral is damaged or destroyed.
Section 5.04 Certification of Public Information. The Borrower and each Lender acknowledge that certain of the Lenders may be “public-side” Lenders (Lenders that do not wish to receive material non-public information with respect to the Borrower, its Subsidiaries or their securities) and, if documents or notices required to be delivered pursuant to this Section 5.04 or otherwise are being distributed through IntraLinks/IntraAgency, SyndTrak or another relevant website or other information platform (the “Platform”), any document or notice that the Borrower has indicated contains Non-Public Information shall not be posted on that portion of the Platform designated for such public-side Lenders. The Borrower agrees to clearly designate all Information provided to the Administrative Agent by or on behalf of the Borrower which is suitable to make available to public-side Lenders. If the Borrower has not indicated whether a document or notice delivered pursuant to this Section 5.04 contains Non-Public Information, the Administrative Agent reserves the right to post such document or notice solely on that portion of the Platform designated for Lenders who wish to receive material non-public information with respect to the Borrower, its Subsidiaries and their securities.
Section 5.05 Existence. Subject to Section 5.19, the Borrower will do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Borrower or any such Subsidiary and (ii) the material rights (charter and statutory), licenses and franchises of the Borrower and each of its Subsidiaries; provided, however, that the Borrower will not be required to preserve any such material right, license or franchise, or the corporate, partnership or other existence of a Subsidiary of the Borrower, if the preservation thereof is no longer desirable in the conduct of the business of the Borrower and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Lenders.
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Section 5.06 Payment of Taxes and Claims. Each of the Loan Parties shall, and shall cause each of its Subsidiaries to, pay all Taxes imposed upon it (including in its capacity as a withholding agent) or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty or fine accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by Law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided that no such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (1) adequate reserves or other appropriate provisions as shall be required in conformity with GAAP shall have been made therefor and (2) in the case of a Tax or claim which has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax or claim.
Section 5.07 Maintenance of Properties. Each of the Loan Parties shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material property used or useful in the business of the Borrower and its Subsidiaries and from time to time shall make or cause to be made all appropriate repairs, renewals and replacements thereof, in each case except to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect.
Section 5.08 Insurance. Each of the Loan Parties shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained, with financially sound and reputable insurers of national standing, such public liability insurance, third party property damage insurance, business interruption insurance, casualty insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of the Loan Parties and their Subsidiaries and insurance against other risks, in each case as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses, in each case in such amounts (giving effect to self-insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as are customary for such Persons. Each such policy of insurance shall (1) name the Secured Parties as additional insureds thereunder as their interests may appear and (2) in the case of each property insurance policy, contain a customary lender loss payable and/or additional insured clause or endorsement, reasonably satisfactory in form and substance to the Collateral Agent.
Section 5.09 Books and Records; Inspections. Each of the Loan Parties shall, and shall cause each of its Subsidiaries to, maintain proper books of record and accounts in which full, true and correct entries in conformity in all material respects with GAAP shall be made of all dealings and transactions in relation to its business and activities. Each Loan Party shall, and shall cause each of its Subsidiaries to, up to two (2) times in any Fiscal Year or at any time during the continuation of an Event of Default, any authorized representatives designated by the Administrative Agent to visit and inspect any of the properties of any Loan Party and any of its respective Subsidiaries, to inspect, copy and take extracts from its and their financial and accounting records and to discuss its and their affairs, finances and accounts with its and their officers and independent public accountants, all upon reasonable notice and at such reasonable times during normal business hours and as often as may reasonably be requested (in each case subject to confidentiality restrictions and privileged materials).
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Section 5.10 Compliance with Contractual Obligations and Laws. Each of the Loan Parties shall, and shall cause each of its Subsidiaries to, comply with the requirements of all Contractual Obligations and all applicable Laws, rules, regulations and orders of any Governmental Authority (including all Environmental Laws), noncompliance with which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 5.11 Environmental Compliance. Each of the Loan Parties shall, and shall cause each of its Subsidiaries to, use and operate all of its facilities in compliance with all Environmental Laws, keep all necessary Governmental Authorizations required pursuant to any Environmental Laws, and handle all Hazardous Materials in compliance with all Environmental Laws, in each case except where the failure to comply with the terms of this clause could not reasonably be expected to have a Material Adverse Effect.
Section 5.12 Subsidiaries. The Borrower shall promptly send to the Collateral Agent written notice setting forth with respect to any Person that becomes a Subsidiary of the Borrower after the Closing Date (i) the date on which such Person became a Subsidiary of the Borrower and (ii) all of the data required to be set forth in Schedules 4.01(a) and 4.01(b) with respect to all Subsidiaries of the Borrower; and such written notice shall be deemed to supplement Schedule 4.01(a) and 4.01(b) for all purposes hereof.
Section 5.13 Further Assurances. Each of the Loan Parties shall, and shall cause each of its Subsidiaries to, at any time or from time to time upon the request of the Administrative Agent, at the expense of the Loan Parties, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Administrative Agent or the Collateral Agent may reasonably request in order to effect fully the purposes of the Facility Documents. In furtherance and not in limitation of the foregoing, each Loan Party shall take such actions as the Administrative Agent or the Collateral Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by the Guarantors and are secured by the assets of the Loan Parties to the extent and in the manner contemplated by the Facility Documents. Upon the exercise by the Administrative Agent or the Collateral Agent of any power, right, privilege or remedy pursuant to this Agreement or the other Facility Documents which required any consent, approval, recording, qualification or authorization of any Governmental Authority, the Borrower will use commercially reasonable efforts to execute and deliver, or will cause the execution and delivery of, all applications, certifications, instruments and other documents and papers that the Administrative Agent or the Collateral Agent may be reasonably required to obtain from the Borrower or any of its Subsidiaries for such consent, approval, recording, qualification or authorization. If perfecting any Lien on any Collateral that consists of rights that are licensed or leased from a third party requires the consent of such third party pursuant to the terms of an applicable license or lease agreement, and such terms are enforceable under applicable law, the Borrower or the Guarantors, as the case may be, will use all commercially reasonable efforts to obtain such consent with respect to the perfecting of such Lien.
Section 5.14 Mortgages. With respect to any fee interest in any real property that (a) is acquired by the Borrower or a Guarantor after the Closing Date that does not constitute an Excluded Asset set forth in clause (3) of the definition thereof or (b) whether owned by the Borrower or a Guarantor as of the Closing Date or subsequently acquired by the Borrower or a Guarantor, ceases to constitute an Excluded Asset set forth in clause (3) of the definition thereof (such real property referred to individually and collectively as the “Premises”), within 120 days of such acquisition or cessation (as applicable), the Borrower will or will cause the applicable Guarantor, as the case may be, to:
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(1) deliver to the Collateral Agent, as mortgagee, for the benefit of the Secured Parties, fully executed Mortgages, duly executed by the Borrower or the applicable Guarantor, as the case may be, together with evidence of the completion (or satisfactory arrangements for the completion), or all recordings and filings of such Mortgage as may be necessary to create a valid, perfected Lien, subject to Permitted Liens and the Intercreditor Agreement, against the Premises purported to be covered thereby;
(2) deliver to the Collateral Agent, a mortgagee’s title insurance policy in favor of the Collateral Agent in an amount equal to 100% of the Fair Market Value of the Premises purported to be covered by the related Mortgage, insuring that the interests created by the Mortgage constitute valid Liens thereon free and clear of all Liens, defects and encumbrances other than Permitted Liens and any other exceptions disclosed in such policy, and such policy shall also include, to the extent available and issued at ordinary rates, customary endorsements and shall be accompanied by evidence of the payment in full (or satisfactory arrangements for the payment) of all premiums thereon;
(3) deliver to the Collateral Agent, the most recent survey of such Premises, together with either (i) an updated survey certification in favor of the Collateral Agent from the applicable surveyor stating that, based on a visual inspection of the property and the knowledge of the surveyor, there has been no change in the facts depicted in the survey or (ii) an affidavit and/or indemnity from the Borrower or the applicable Guarantor, as the case may be, stating that to its knowledge there has been no change in the facts depicted in the survey, other than, in each case, changes that do not materially adversely affect the use by the Borrower or Guarantor, as applicable, of such Premises for the Borrower or such Guarantor’s business as so conducted, or intended to be conducted, at such Premises and in each case, in form sufficient for the title insurer issuing the title policy to remove the standard survey exception from such policy and issue a survey endorsement to such policy; and
(4) deliver to the Collateral Agent an opinion of outside counsel reasonably acceptable to the Collateral Agent that such Mortgage has been duly authorized, executed and delivered by the Borrower or such Guarantor, constitutes a legal, valid, binding and enforceable obligation of the Borrower or such Guarantor and creates a valid perfected Lien in the Premises purported to be covered thereby.
Section 5.15 Post-Closing Obligations. Each of the Loan Parties shall, and shall cause each of its Subsidiaries to, complete all undertakings set forth on Schedule 5.15 attached hereto in the time periods specified therein (as each may be extended by the Administrative Agent in its reasonable discretion).
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Section 5.16 Restricted Payments. (a) The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend on, or make any other payment or distribution in respect of, its Equity Interests (including any dividend or distribution payable in connection with any merger or consolidation involving the Borrower) or similar payment to the direct or indirect holders thereof in their capacity as such (other than any dividends or distributions payable solely in its Equity Interests (other than Disqualified Stock) and dividends or distributions payable to the Borrower or any of its Subsidiaries (and, if such Subsidiary has stockholders other than the Borrower or other Subsidiaries, to its other stockholders on no more than a pro rata basis));
(ii) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Borrower held by any Person or any Equity Interests of any Subsidiary of the Borrower held by any Affiliate of the Borrower (in each case other than held by the Borrower or a Subsidiary of the Borrower), including in connection with any merger or consolidation and including the exercise of any option to exchange any Equity Interests (other than into Equity Interests of the Borrower that are not Disqualified Stock);
(iii) make any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to the scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Indebtedness that is contractually subordinated in right of payment to any of the Obligations or any Guaranty thereof, any Indebtedness that is secured by Liens on any of the Collateral junior in priority to the Liens securing the Obligations or any Guaranty thereof (including for the avoidance of doubt, the Existing Notes and the 1.5 Lien Notes) or any unsecured Indebtedness (other than the payment of interest and other than the purchase, repurchase or other acquisition of such Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within ninety days of the date of such purchase, repurchase or other acquisition); provided that, for the avoidance of doubt, this clause (iii) shall not prohibit the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Qualified Receivables Facility by the applicable Receivables Entity or of the Backstop Notes by Loan SPV in accordance with the terms thereof; or
(iv) make any Restricted Investment.
(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”).
(b) The foregoing provisions will not prohibit:
(i) the payment of any dividend or other distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or other distribution or giving of the irrevocable redemption notice, so long as said date is after the Closing Date, if at said date of declaration or notice, such payment would have complied with the provisions of this Agreement;
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(ii) any Restricted Payment made in exchange for, or with the net cash proceeds from, the substantially concurrent sale of Equity Interests of the Borrower (other than any Disqualified Stock and other than Equity Interests issued or sold to a Subsidiary of the Borrower) or a substantially concurrent cash capital contribution received by the Borrower from its shareholders;
(iii) the defeasance, redemption, repurchase, retirement or other acquisition of Indebtedness of the Borrower or any Guarantor that is contractually subordinated in right of payment to any of the Obligations or to any Guaranty thereof, Indebtedness that is secured by Liens on any of the Collateral junior in priority to the Liens securing the Obligations or any Guaranty thereof or unsecured Indebtedness in exchange for, or with the net cash proceeds from, an Incurrence of Permitted Refinancing Debt with respect to such Indebtedness;
(iv) the redemption, repurchase, retirement or other acquisition for value of any Equity Interests of the Borrower or any Subsidiary of the Borrower held by current or former employees, officers, directors or consultants of the Borrower (or any of its Subsidiaries), in each case solely upon such Person’s death, disability, retirement or termination of employment or under the terms of any Employee Benefit Plan or other agreement under which such Equity Interests were issued; provided that the aggregate amount of such repurchases and other acquisitions (excluding amounts representing cancellation of Indebtedness) shall not exceed $1.0 million in any Fiscal Year;
(v) payments of dividends on Disqualified Stock issued pursuant to Section 5.18;
(vi) repurchases of Capital Stock deemed to occur upon exercise of stock options if such Capital Stock represents a portion of the exercise price of such options;
(vii) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Borrower; provided, however, that any such cash payment shall not be for the purpose of evading the limitations of this Section 5.16;
(viii) so long as no Default or Event of Default has occurred and is continuing or would be caused thereby, payments of intercompany subordinated Indebtedness, the Incurrence of which was permitted under clause (v) of Section 5.18(b);
(ix) the repurchase, redemption or other acquisition or retirement for value of any Indebtedness of the Borrower or any Guarantor that is contractually subordinated in right of payment to any of the Obligations or to any Guaranty thereof, any Indebtedness that is secured by Liens on any of the Collateral junior in priority to the Liens securing the Obligations or any Guaranty thereof or any unsecured Indebtedness upon the occurrence of an “asset sale” or “change of control”; provided that no such repurchase, redemption or other acquisition or retirement for value of any such Indebtedness shall be permitted prior to repayment in full of the Loans and all other Obligations that are accrued and payable in connection therewith; or
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(x) on or after January 1, 2025, the repurchase, redemption or other acquisition or retirement for value of 1.5 Lien Notes; provided that (I) the aggregate principal amount of 1.5 Lien Notes repurchased, redeemed or otherwise acquired or retired for value pursuant to this paragraph (x) does not exceed $[***], (II) the Fair Market Value of the consideration paid for any 1.5 Lien Notes in any transaction permitted by this paragraph (x) does not exceed [***]% of the principal amount of the 1.5 Lien Notes repurchased, redeemed or otherwise acquired or retired for value in such transaction and (III) either (x) (1) the Adjusted Pre-Tax Income of the Borrower and its Subsidiaries for the four-Fiscal-Quarter period ending on the last day of the most recent Fiscal Quarter for which financials are available is greater than $[***] and (2) Liquidity, calculated on a pro forma basis after giving effect to such repurchase, redemption or other acquisition or retirement for value, is greater than $[***] or (y) the Required Ad Hoc Group Lenders shall have approved such repurchase, redemption or other acquisition or retirement for value (provided that the Required Ad Hoc Group Lenders shall be deemed to have provided such approval unless the Required Ad Hoc Group Lenders shall object thereto by written notice to the Administrative Agent within four (4) Business Days after having received notice thereof).
(xi) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to the scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Indebtedness with respect to a Qualified Receivables Facility.
(c) The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of the Restricted Payment of the assets proposed to be transferred by the Borrower or such Subsidiary, as the case may be, pursuant to the Restricted Payment.
(d) [Reserved.]
(e) Notwithstanding anything to the contrary set forth in this Section 5.16, no Loan Party shall make any Restricted Payment to, or Investment in, any Subsidiary (other than another Loan Party) consisting of any intellectual property or any other assets (other than cash and Cash Equivalents) material to the operations of the Borrower and its Subsidiaries in the ordinary course of business.
Section 5.17 Dividend and Other Payment Restrictions Affecting Subsidiaries. (a) The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Subsidiary of the Borrower to:
(i) pay dividends or make any other distributions to the Borrower or any of its Subsidiaries with respect to its Capital Stock or any other interest or participation in, or measured by, its profits;
(ii) pay any Indebtedness owed to the Borrower or any of its Subsidiaries;
(iii) make any loans or advances to the Borrower or any of its Subsidiaries; or
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(iv) sell, lease or transfer any of its properties or assets to the Borrower or any of its Subsidiaries.
(b) However, the foregoing restrictions will not apply to encumbrances or restrictions existing under or by reason of:
(i) any agreements in effect or entered into on the Closing Date, including agreements governing Existing Indebtedness as in effect on the Closing Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof (in each case, regardless of whether such replacement or refinancing is consummated at the same time or later than the termination or repayment of the Indebtedness being refinanced or replaced), in whole or in part; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in the agreements governing such Indebtedness as in effect on the Closing Date;
(ii) the 1.5 Lien Notes Indenture Documents, the Existing Notes Indenture Documents and the Backstop Notes, in each case, in effect as of the Closing Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof (in each case, regardless of whether such replacement or refinancing is consummated at the same time or later than the termination or repayment of the Indebtedness being refinanced or replaced) and any additional credit facilities permitted under this Agreement; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or additional credit facilities are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in the 1.5 Lien Notes Indenture Documents as in effect on the Closing Date;
(iii) the Facility Documents;
(iv) applicable law and any applicable rule, regulation or order;
(v) customary non-assignment provisions in leases, licenses or other agreements entered into in the ordinary course of business;
(vi) purchase money obligations and Capital Lease Obligations that impose restrictions of the nature described in clause (iv) of Section 5.17(a) on the property so acquired;
(vii) any agreement for the sale or other disposition of all or substantially all of the Capital Stock or assets of a Subsidiary of the Borrower that restricts distributions by that Subsidiary pending its sale or other disposition thereof;
(viii) any agreement or other instrument of a Person acquired by the Borrower or any Subsidiary of the Borrower in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
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(ix) Liens that limit the right of the Borrower or any of its Subsidiaries to dispose of the asset or assets subject to such Lien;
(x) customary provisions limiting the disposition or distribution of assets or property in partnership, joint venture, asset sale agreements, stock sale agreements and other similar agreements, which limitation is applicable only to the assets that are the subject of such agreements;
(xi) Permitted Refinancing Debt, provided that the restrictions contained in the agreements governing such Permitted Refinancing Debt are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;
(xii) any such encumbrance or restriction with respect to any Foreign Subsidiary of the Borrower pursuant to an agreement governing Indebtedness incurred by such Foreign Subsidiary, (a) if the encumbrances and restrictions contained in any such agreement or instrument taken as a whole are not materially more restrictive to the Borrower and its Subsidiaries than the encumbrances and restrictions contained in the agreements described in clauses (i) and (ii) above (as determined in good faith by the Borrower), or (b) if such encumbrance or restriction is not materially more restrictive to the Borrower and its Subsidiaries than is customary in comparable financings (as determined in good faith by the Borrower) and either (x) the Borrower determines in good faith that such encumbrance or restriction will not materially affect the Borrower’s ability to make the principal or interest payments on the Loans or (y) such encumbrance or restriction applies only if a default occurs in respect of a payment or financial covenant relating to such Indebtedness;
(xiii) any encumbrance or restriction existing under or by reason of contractual requirements of a Receivables Entity in connection with a Qualified Receivables Transaction; provided that such restrictions apply only to such Receivables Entity or any Subsidiary acting as servicer or sub-servicer for such Qualified Receivables Transaction; provided that any such encumbrance or restriction applicable to a Subsidiary acting as servicer or sub-servicer for such Qualified Receivables Transaction shall apply only to Servicer Accounts;
(xiv) restrictions on cash or other deposits or net worth imposed by landlords, suppliers and customers under contracts entered into in the ordinary course of business; and
(xv) any encumbrance or restriction applicable only to Loan SPV existing under or by reason of the Organizational Documents of Loan SPV or the Backstop Notes, in each case as in existence on the Closing Date.
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Section 5.18 Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Debt) and the Borrower will not issue any Disqualified Stock and will not permit any of its Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock.
(b) The foregoing provisions will not prohibit the Incurrence of any of the following items of Indebtedness:
(i) the Incurrence by (1) the Borrower of 1.5 Lien Notes outstanding on the Closing Date (after giving effect to the Exchange) in an aggregate principal amount not to exceed $682,298,000 (and Guarantees thereof by the Loan Parties), (2) the Borrower of Existing Notes outstanding on the Closing Date (after giving effect to the Exchange) in an aggregate principal amount not to exceed $317,702,000 (and Guarantees thereof by the Loan Parties), and (3) Permitted Refinancing Debt in exchange for, or the net cash proceeds of which are used to extend, refinance, renew, replace, defease or refund (in each case, whether or not upon termination and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities), in whole or in part, any of the foregoing;
(ii) the Incurrence by the Borrower and the Guarantors of Indebtedness represented by the Loans and the related Guarantees;
(iii) [reserved;]
(iv) the Incurrence by the Borrower or any of its Subsidiaries of Permitted Refinancing Debt in exchange for, or the net cash proceeds of which are used to extend, refinance, renew, replace, defease or refund (in each case, whether or not upon termination and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities), in whole or in part, Indebtedness that was Incurred pursuant to clauses (ii), (iv) or (viii) of this Section 5.18(b);
(v) the Incurrence of intercompany Indebtedness of the Borrower, a Guarantor or any Subsidiary of the Borrower (other than a Receivables Entity and other than Loan SPV) for so long as such Indebtedness is not prohibited by Section 5.18; provided that (i) such Indebtedness shall be unsecured and if owing by the Borrower or any Guarantor, contractually subordinated in all respects to the Obligations and any Guaranty thereof, and (ii) if as of any date any Person other than the Borrower or a Subsidiary owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness (other than Permitted Liens of the type described in clause (1) or (15) or any permitted refinancing Lien in respect thereof), such date shall be deemed the incurrence of Indebtedness not permitted under this clause (v);
(vi) Guarantees by the Borrower or any Subsidiary of the Borrower of Indebtedness of the Borrower or any Subsidiary of the Borrower (other than a Receivables Entity and other than Loan SPV) otherwise permitted hereunder so long as the Person giving such Guarantee could have Incurred the Indebtedness that is being Guaranteed; provided that if the Indebtedness being guaranteed (x) is subordinated to any of the Obligations or a Guaranty thereof, then the Guarantee must be subordinated to the same extent as the Indebtedness being guaranteed or (y) is owed by any Subsidiary of the Borrower that is not a Guarantor, such Guarantee shall be subordinated to the prior payment in full of the Obligations in the case of the Borrower or the Guarantees in the case of a Guarantor;
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(vii) the Incurrence by the Borrower or any of its Subsidiaries of Hedging Obligations that are Incurred for the purpose of fixing or hedging (A) interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Agreement to be outstanding or (B) currency exchange risk in connection with existing financial obligations in the ordinary course of business and not for purposes of speculation;
(viii) the Incurrence on or prior to the Closing Date of Existing Indebtedness (other than Indebtedness described in clauses (i), (ii) or (v) of this Section 5.18(b)); provided that all Existing Indebtedness (other than Existing Indebtedness with a principal amount not in excess of $1 million individually or $2 million in the aggregate for all such Existing Indebtedness) shall be set forth on Schedule 5.18 attached hereto;
(ix) the Incurrence of obligations in respect of letters of credit, bank guarantees, performance, bid and surety bonds and completion guarantees provided by the Borrower or any of its Subsidiaries in the ordinary course of business;
(x) the Incurrence by the Borrower or any of its Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within four Business Days of its Incurrence;
(xi) [reserved;]
(xii) Indebtedness of the Borrower or any Subsidiary of the Borrower consisting of the financing of insurance premiums in the ordinary course of business;
(xiii) Indebtedness consisting of promissory notes or similar Indebtedness issued by the Borrower or any Subsidiary of the Borrower to current, future or former officers, directors and employees thereof, or to their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Borrower or a Subsidiary of the Borrower to the extent described in clause (iv) of Section 5.16(b);
(xiv) Indebtedness arising from agreements of the Borrower or any of its Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Borrower or such Subsidiary in connection with such disposition;
(xv) Indebtedness Incurred by a Canadian Direct Lending Subsidiary (the borrower in respect of such Indebtedness, the “Canadian Recourse Facility Borrower”) (and any unsecured Guarantee thereof by the Borrower) with respect to one or more single-pay recourse facilities (and Permitted Refinancing Indebtedness in respect thereof) in an aggregate principal amount outstanding at any one time not in excess of $25.0 million (the “Canadian Recourse Facility”);
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(xvi) Indebtedness Incurred by a Receivables Entity (and Guarantees thereof by the Borrower or any Subsidiary that constitute Standard Securitization Undertakings) in a Qualified Receivables Transaction either (i) consisting of the Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility in each case in effect as of the Closing Date (after giving effect to Section 3.01(j)) or as amended or otherwise modified, provided no such amendment or modification directly affecting the rights or obligations of the Borrower (it being understood that the rights of the Borrower shall include the capacity and availability (including, without limitation, as a result of any “borrowing base” or similar concept) under such Qualified Receivables Facility) shall be materially adverse to the Borrower, or (ii) having terms (including as to advance rates, minimum liquidity, restricted cash and pay-down provisions) either substantially consistent with the terms of the Indebtedness described in subclause (i) of this clause (P) or otherwise acceptable to the Required Lenders or the Required Ad Hoc Group Lenders (provided that the Required Ad Hoc Group Lenders shall be deemed to have provided such approval unless the Required Ad Hoc Group Lenders shall object thereto by written notice to the Administrative Agent within four (4) Business Days after having received notice thereof); and
(xvii) Indebtedness of Loan SPV consisting of Backstop Notes in an aggregate principal amount not to exceed $[***] and the Guarantee thereof by the Borrower; provided that such Guarantee shall be unsecured and contractually subordinated in right of payment to the payment in full of the Obligations of the Borrower.
(c) For purposes of determining compliance with this Section 5.18, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (i) through (xvii) of paragraph (b) above, the Borrower will, in its sole discretion, divide and classify such item of Indebtedness in any manner that complies with this Section 5.18 and will only be required to include the amount and type of such Indebtedness in one of such clauses, and may re-classify any such item of Indebtedness from time to time among such clauses, so long as such item meets the applicable criteria for such category. For the avoidance of doubt, Indebtedness may be classified as Incurred in part pursuant to one of the clauses (i) through (xvii) above, and in part under one or more other clauses. Indebtedness outstanding on the Closing Date under each of the Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility shall be treated as Incurred pursuant to clause (xvi) of paragraph (b) above.
(d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.
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(e) The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.
(f) Accrual of interest and dividends, accretion of accreted value, issuance of securities paid-in-kind, the accretion or amortization of original issue discount, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock, the reclassification of commitments or obligations not treated as Indebtedness due to a change in GAAP, changes to amounts outstanding in respect of Hedging Obligations solely as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 5.18.
(g) The Borrower will not incur, and will not permit any Guarantor to incur, any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Obligations and the Guaranties thereof on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured or by virtue of being secured on a junior Lien priority basis.
Section 5.19 Mergers, Consolidations, Sales of Assets and Acquisitions. The Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, merge into, amalgamate with or consolidate with any other person, or permit any other person to merge into, amalgamate with or consolidate with it, or Dispose of (in one transaction or in a series of related transactions) all or any part of its assets (whether now owned or hereafter acquired), or Dispose of any Equity Interests of any Subsidiary, or purchase, lease or otherwise acquire (in one transaction or a series of related transactions) all or substantially all of the assets of any other person or division or line of business of a person, except that this Section 5.19 shall not prohibit:
(a) if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing or would result therefrom, (i) the merger, amalgamation or consolidation of any Subsidiary of the Borrower with or into the Borrower in a transaction in which the Borrower is the survivor, (ii) the merger, amalgamation or consolidation of any Subsidiary of the Borrower with or into any Loan Party (other than the Borrower) in a transaction in which the surviving or resulting entity is a Domestic Subsidiary and is or becomes a Loan Party and, in the case of each of clauses (i) and (ii), no person other than the Borrower or another Loan Party receives any consideration, (iii) the merger, amalgamation or consolidation of any Subsidiary of the Borrower (other than a Loan Party) with or into any other Subsidiary that is not a Loan Party, (iv) the liquidation or dissolution or change in form of entity of any Subsidiary if (x) the Borrower determines in good faith that such liquidation, dissolution or change in form is in the best interests of the Borrower and is not materially disadvantageous to the Lenders, (y) no Loan Party is liquidated or dissolved into a Subsidiary that is not a Loan Party and (z) no Domestic Subsidiary is liquidated or dissolved into a Foreign Subsidiary, (v) any Subsidiary of the Borrower may merge, amalgamate or consolidate with any other person in order to effect an Investment permitted pursuant to Section 5.16 so long as the continuing or surviving person shall be a Subsidiary, which shall be a Domestic Subsidiary and a Loan Party if the merging, amalgamating or consolidating Subsidiary was a Loan Party and which together with each of its Subsidiaries shall have complied with any applicable requirements of Section 7.09, (vi) any Subsidiary may merge, amalgamate or consolidate with any other person in order to effect a Disposition otherwise permitted pursuant to this Section 5.19, or (vii) any Permitted Acquisition and any purchase, lease or other acquisition (in one transaction or a series of related transactions) of all or substantially all of the assets of any other person or division or line of business of a person which, if structured as a merger or purchase of Equity Interests, would constitute a Permitted Acquisition;
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(b) a Disposition of assets to the Borrower or any Subsidiary of the Borrower (other than a Receivables Entity and other than Loan SPV); provided that any Disposition by a Loan Party to a Subsidiary that is not a Loan Party in reliance on this clause (b) shall be for cash and for Fair Market Value;
(c) an issuance of Equity Interests by a Subsidiary of the Borrower to the Borrower or to a Wholly-Owned Subsidiary of the Borrower that is a Subsidiary;
(d) a Restricted Payment that is permitted by Section 5.16 or a Permitted Investment;
(e) the Incurrence of Permitted Liens and, subject to the Intercreditor Agreement, the Disposition of assets subject to such Liens by or on behalf of the Person holding such Liens;
(f) the Disposition of accounts in accordance with industry practice in connection with the compromise or collection thereof;
(g) any Disposition of cash or Cash Equivalents;
(h) the lease, assignment or sub-lease of any property in the ordinary course of business;
(i) any surrender or waiver of contract rights or the settlement, release or surrender of contract rights or other litigation claims in the ordinary course of business;
(j) sales of assets that have become worn out, obsolete or damaged or otherwise unsuitable for use in connection with the business of the Borrower or any of its Subsidiaries;
(k) the license of patents, trademarks, copyrights, software applications and know-how to Subsidiaries of the Borrower and to third Persons in the ordinary course of business;
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(l) the Disposition of precious metals in the ordinary course of business;
(m) Dispositions of motor vehicles securing consumer loans made by the Borrower and its Subsidiaries in the ordinary course of business;
(n) sales of loans receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Entity in connection with a Qualified Receivables Transaction;
(o) transfers of loans receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” by a Receivables Entity in a Qualified Receivables Transaction;
(p) [***]
(q) [reserved]; and
(r) other Dispositions of assets to persons other than the Borrower and its Subsidiaries with a Fair Market Value not in excess of $5 million without the prior written consent of the Required Ad Hoc Group Lenders; provided, that (i) the Net Proceeds thereof, if any, are applied in accordance with Section 2.14 to the extent required thereby and (ii) any such Dispositions shall comply with the immediately following paragraph of this Section 5.19.
Notwithstanding anything to the contrary contained in Section 5.19, no Disposition of assets under Section 5.19(p)(A) or Section 5.19(r) shall be permitted unless (x) such Disposition is for at least Fair Market Value, and (y) at least 75% of the consideration for such Disposition received by the Borrower and its Subsidiaries consists of cash or Cash Equivalents; provided that for purposes of this clause (y), each of the following shall be deemed to be cash: (a) any liabilities (as shown on the Borrower’s or such Subsidiary’s most recent balance sheet) of the Borrower or any Subsidiary of the Borrower (other than contingent liabilities and liabilities that are by their terms subordinated to any of the Obligations or any Guaranty thereof) that are assumed by the transferee of any such assets and with respect to which the Borrower or such Subsidiary is unconditionally released from further liability, and (b) any notes or other obligations or other securities received by the Borrower or such Subsidiary from the transferee that are converted by the Borrower or such Subsidiary into cash or Cash Equivalents within 45 days after receipt thereof (to the extent of the cash or Cash Equivalents received).
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Notwithstanding anything to the contrary set forth in this Section 5.19, no Loan Party shall make any Disposition to any Subsidiary that is not a Loan Party consisting of any intellectual property or any other assets (other than cash and Cash Equivalents) material to the operations of the Borrower and its Subsidiaries in the ordinary course of business.
Section 5.20 Transactions with Affiliates. (a) The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, exchange, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any contract, agreement, understanding, loan, advance or Guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an “Affiliate Transaction”) involving aggregate consideration in excess of $1 million, unless:
(i) such Affiliate Transaction is on terms that are no less favorable to the Borrower or the relevant Subsidiary than those that would have been obtained in a comparable transaction at the time in an arm’s-length transaction with a person who was not an Affiliate; and
(ii) if such Affiliate Transaction involves an amount in excess of $2 million, the terms of the Affiliate Transaction are set forth in writing and a majority of the non-employee directors of the Borrower disinterested with respect to such Affiliate Transaction has determined in good faith that the criteria set forth in clause (i) of this Section 5.20(a) are satisfied and has approved the relevant Affiliate Transaction as evidenced by a resolution of the Board of Directors of the Borrower set forth in an officer’s certificate.
(b) The foregoing provisions will not apply to the following:
(i) any employment agreement or compensation plan or arrangement and other benefits (including retirement, health, stock option and other benefit plans) entered into by the Borrower or any of its Subsidiaries in the ordinary course of business of the Borrower or such Subsidiary;
(ii) transactions exclusively between or among the Loan Parties; provided that such transactions are not otherwise prohibited by the Facility Documents;
(iii) any agreement existing on the Closing Date and, unless expressly disclosed in an Annual Report on Form 10-K, Quarterly Report on Form 10-Q or Current Report on Form 8-K, in each case of the Borrower and made publicly available on the website of the SEC prior to the Closing Date, set forth on Schedule 5.20(b)(iii) attached hereto, as in effect on the Closing Date, or as modified, amended or amended and restated by any modification, amendment or amendment and restatement (x) that, taken as a whole, is not more disadvantageous to the Lenders in any material respect than such agreement as it was in effect on the Closing Date or (y) made in compliance with the applicable provisions of clauses (i) and (ii) of Section 5.20(a);
(iv) reasonable compensation of, and indemnity arrangements in favor of, directors of the Borrower and its Subsidiaries;
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(v) the issuance or sale of any Equity Interests (other than Disqualified Stock) of the Borrower and any contribution to the common equity of the Borrower;
(vi) the issuance of loans under the Credit Agreement on the Closing Date in an aggregate initial principal amount equal to $[***] to Loan SPV and the Guarantee thereof by the Borrower; provided that such Guarantee shall be unsecured and contractually subordinated in right of payment to the payment in full of the Obligations of the Borrower;
(vii) transactions with customers, clients, lessors, landlords, suppliers, contractors, or purchasers or sellers of goods or services that are Affiliates, in each case, in the ordinary course of business and otherwise in compliance with the terms of this Agreement that are fair to the Borrower and its Subsidiaries, in the reasonable determination of the Board of Directors of the Borrower;
(viii) sales or other transfers or dispositions of accounts receivable and other related assets customarily transferred in an asset securitization transaction involving accounts receivable to a Receivables Entity in a Qualified Receivables Transaction, and acquisitions of Permitted Investments in connection with, and any other customary transactions effected as a part of, a Qualified Receivables Transaction; and
(ix) Restricted Payments that are permitted by Section 5.16 and Permitted Investments.
Section 5.21 Liens. The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind on any asset now owned or hereafter acquired, except Permitted Liens.
Section 5.22 [Reserved.]
Section 5.23 Business Activities. The Borrower shall not, and shall not permit any of its Subsidiaries to, engage in any business other than Similar Businesses.
Section 5.24 Stay, Extension and Usury Laws. Each of the Borrower and the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of the Facility Documents; and each of the Borrower and the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to any Agent or Lender, but shall suffer and permit the execution of every such power as though no such law has been enacted.
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Section 5.25 Loan SPV. The Borrower shall not permit Loan SPV (A) to Incur any Indebtedness other than Backstop Notes Incurred on the Closing Date in aggregate initial principal amount not to exceed $[***], plus accrued interest and any interest that is paid in kind and capitalized following the Closing Date in accordance with the terms of the Backstop Notes, (B) to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind on any asset now owned or hereafter acquired by it, other than Liens to secure the obligations under the Backstop Notes, (C) to Dispose of any assets, business or property, other than the making of interest, premium and principal payments to the holders of the Backstop Notes in connection with the satisfaction of any of the Loan SPV’s obligations under the Backstop Notes in accordance with their terms, (D) to make or hold any Investment other than the Loans and cash or Cash Equivalents, (E) to make any Restricted Payment, other than in the form of cash dividends to its parent to the extent consistent with its obligations in respect of the Backstop Notes, (F) to, directly or indirectly, merge into, amalgamate with or consolidate with any other Person, or permit any other Person to merge into, amalgamate with or consolidate with it, other than a merger or other consolidation with and into Borrower or any Subsidiary in connection with the satisfaction in full of the Backstop Notes, (G) to acquire any assets, business or property other than the Loans on the Closing Date and any cash or Cash Equivalents, (H) breach or violate any of its Organizational Documents or the Backstop Notes, or (I) engage in any business or activity other than (1) the making on the Closing Date, and ownership of, Loans in an aggregate, initial principal amount not to exceed $[***], (2) maintaining its corporate existence, (3) participating in tax, accounting and other administrative activities, (4) execution and delivery of the Backstop Notes and any other security and other documentation incidental there to which it is a party and the performance of its obligations thereunder, (5) receiving and holding cash and Cash Equivalents in deposit accounts and securities accounts, and (6) activities incidental to the businesses or activities described in clauses (1) through (5) of this Section 5.25(I). Notwithstanding anything to the contrary set forth in this Agreement or otherwise, neither the Borrower nor any of its Subsidiaries shall (i) repay, prepay, purchase, repurchase, redeem, defease or otherwise acquire or retire for value any Backstop Notes (except (A) payments by Loan SPV and (B) subject to the such guarantee being contractually subordinated in right of payment to the payment in full of the Obligations of the Borrower, payments under the guarantee of the Backstop Notes by the Borrower) or (ii) make any Investment in, or Dispose of any assets or properties to, Loan SPV (other than (i) holding Equity Interests of Loan SPV issued to the Borrower or its applicable Subsidiary prior to the Closing Date and (ii) making payments on the Loans held by Loan SPV in accordance with the terms of this Agreement and the other Facility Documents).
Section 5.26 Financial Covenants. The Borrower shall, at all times:
(a) Minimum Liquidity. Maintain Liquidity, as of the last day of each calendar month, beginning May 31, 2023, of (a) prior to September 30, 2024, equal to or greater than $[***] and (b) on and after September 30, 2024, equal to or greater than $[***].
(b) Minimum Adjusted Pre-Tax Income. Maintain the Adjusted Pre-Tax Income of itself and its Subsidiaries for each four-Fiscal-Quarter period, beginning with such period ending on March 31, 2024, of at least the Minimum Adjusted Pre-Tax Income.
Section 5.27 Operating Covenants. The Borrower shall:
(a) Deliver a Business Plan reasonably satisfactory to the Required Ad Hoc Group Lenders no later than August 31, 2023; provided that if no such Business Plan reasonably satisfactory to the Required Ad Hoc Group Lenders is delivered by such date, the Borrower shall retain by no later than September 30, 2023, a nationally recognized consulting firm, whose selection and compensation shall be subject to the reasonable consent of the Required Ad Hoc Group Lenders to advise on, inter alia, selling, general and administrative expenses and operating expenses of the Borrower and its Subsidiaries; provided further that, following such retention, the Borrower and its Subsidiaries shall promptly consider such consulting firm’s recommendations in good faith and promptly implement such recommendations to the extent appropriate in the business judgment of management of the Borrower and its Subsidiaries.
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(b) [Reserved]
(c) As of the last day of each Fiscal Quarter, beginning on March 31, 2024, maintain a ratio of (i) Operating Expenses for the four-Fiscal-Quarter period ending on the last day of such Fiscal Quarter to (ii) to the average amount of gross loans receivable for the five-Fiscal-Quarter period ending on the last day of such Fiscal Quarter (as shown on the balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP), which shall be calculated as the average of the gross loans receivable balance as of the last day of each Fiscal Quarter in the five-Fiscal-Quarter period ending on the last day of such Fiscal Quarter, not greater than the Maximum Operating Expense to Asset Ratio for such Fiscal Quarter.
(d) As of the last day of each Fiscal Quarter, beginning on December 31, 2023, cause:
(i) the aggregate outstanding principal amount of Indebtedness with respect to Qualified Receivables Facilities related to the United States direct lending business line of the Borrower and its Subsidiaries not to exceed [***]% of the amount of the aggregate commitments under such Qualified Receivable Facilities; and
(ii) the aggregate outstanding principal amount of Indebtedness with respect to all Qualified Receivables Facilities related to the Canada direct lending business line of the Borrower and its Subsidiaries, not to exceed [***]% of the amount of the aggregate commitments under such Qualified Receivable Facilities.
(e) In the event that any covenant set forth in clauses (a) through (d) above fails to be satisfied, the Borrower shall promptly (and, in no event, later than ninety (90) days following the date such failure occurs) appoint to the Board of Directors of the Borrower a new independent director (reasonably satisfactory to the Required Ad Hoc Group Lenders) who possesses expertise in the business of the Borrower and its Subsidiaries. For the avoidance of doubt, appointment of such independent director shall not cure or waive any such breach (or any resulting Default or Event of Default).
(f) For purposes of determining compliance with Section 5.27(d), the net proceeds of any Permitted Equity Issuance by the Borrower after the last day of any Fiscal Quarter and on or prior to the day that is ten (10) days thereafter shall, at the written request of Borrower, solely for purposes of calculating compliance with Section 5.27(d) be subtracted from the outstanding principal amount of Indebtedness with respect to a single Qualified Receivables Facility at the end of such Fiscal Quarter; provided, that:
(i) the net proceeds of such Permitted Equity Issuance shall be in an amount at least equal to the minimum amount necessary for the Borrower to be in compliance with Section 5.27 with respect to such Qualified Receivables Facility; and
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(ii) the net proceeds of a Permitted Equity Issuance may not be applied as set forth in this Section 5.27(f) (A) more than two (2) times per Fiscal Year, (B) more than three (3) times during the term of this Agreement and (C) with respect to more than two (2) consecutive Fiscal Quarters.
The parties hereby acknowledge, notwithstanding anything to the contrary set forth herein or otherwise, that this Section 5.27(f) (and any Permitted Equity Issuance given effect hereunder) may not be relied on for purposes of calculating any other financial ratios and shall not result in any adjustment other than for purposes of compliance with Section 5.27(d) (and not, for avoidance of doubt, for purposes of determining any basket sizes, the permissibility of any transaction or for any other purposes of this Agreement).
Article VI
EVENTS OF DEFAULT
Section 6.01 Events of Default. If any of the following events (“Events of Default”) shall occur:
(a) any Loan Party shall fail to pay (i) when due any of the outstanding principal of the Loans or (ii) within three (3) Business Days after the same become due and payable, accrued interest on the Loans or any fee or any other amount due hereunder; or
(b) any representation or warranty made by or on behalf of any Loan Party herein or in any other Facility Document, certificate, financial statement or other document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or
(c) (i) any Loan Party or any Subsidiary thereof shall fail to perform or observe any term, covenant or agreement contained in Sections 2.07, 5.01(a), (b), (c), (d), (f), (g) or (h), 5.03(c), 5.16, 5.17, 5.18, 5.19, 5.20, 5.21, 5.23, 5.24, 5.25, 5.26, 5.27(c) or 5.27(e) of this Agreement; (ii) the Loan Parties or any of their Subsidiaries shall fail to perform or observe any other term, covenant or agreement contained in Section 5.27(a) or (d) and such failure continues for 10 days; or (iii) the Loan Parties or any of their Subsidiaries shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or any other Facility Document, and such failure continues for 30 days; provided, that to the extent any Facility Document expressly provides for a shorter grace period, that shorter grace period will be given effect; or
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(d) (i) any Loan Party or any Subsidiary thereof (other than any Receivables Entity) fails (1) to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) in respect of the 1.5 Lien Notes Indenture, the Existing Notes Indenture or any other Indebtedness (other than Indebtedness hereunder or any Qualified Receivables Facility) having an aggregate principal amount of more than $10,000,000, or (2) to observe or perform any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with or without the giving of notice or lapse of time, such Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity; provided that this clause (d)(i)(2) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness and such Indebtedness is repaid when required under the documents providing for such Indebtedness; (ii) there occurs any event of default under any Swap Agreement as to which a Loan Party or any Subsidiary thereof is the Defaulting Party (as defined in such Swap Agreement) or any Termination Event (as so defined) under such Swap Agreement as to which such Loan Party or any Subsidiary thereof is an Affected Party (as so defined) and, in either event, the Swap Agreement termination value exceeds $1,000,000; provided that in the case of clauses (d)(i) and (ii), any such failure referred to in clause (d)(i) or any such event of default or Termination Event referred to in clause (d)(ii), as the case may be, is unremedied and is not validly waived by the holders of such Indebtedness, or the counterparties of such Swap Agreement, as the case may be, in accordance with the terms of the documents governing such Indebtedness or Swap Agreement, as the case may be, prior to any termination of the Commitments or acceleration of the Loans pursuant to this Section 6.01; or (iii) the occurrence of an “Event of Default” or other similar event or circumstance under the Existing First Heritage SPV Facility, the Existing Flexiti Securitization Notes, the Existing Flexiti SPV Facility, the Existing Heights SPV Facility and the Existing Revolving Canada SPV Facility or any other Qualified Receivables Facility, in each case, after giving effect to any grace period therein, that either (A) results in the acceleration of all or any portion of such Indebtedness prior to its final stated maturity or (B) has not been remedied (by amendment, cure, waiver or otherwise) thereunder within thirty (30) days after the related lenders thereunder received notice of the occurrence of such “Event of Default” (or other similar event or circumstance); or
(e) any judgment or order for the payment of money in excess of $1,000,000 shall be rendered against any Loan Party or any Subsidiary thereof and either (x) enforcement proceedings shall have been commenced by any creditor upon such judgment or order which shall not have been stayed or dismissed within thirty (30) days after the commencement of such proceedings or (y) there shall be any period of forty-five (45) consecutive days during which such judgment remains unpaid and a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(f) (i) any Loan Party or any Subsidiary thereof shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or (ii) any proceeding shall be instituted by or against a Loan Party or any Subsidiary thereof seeking relief under any Law relating to bankruptcy, insolvency or reorganization or relief of debtors or seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding-up, dissolution, reorganization, arrangement, compromise, adjustment, protection, relief, or composition of it or its debts under any Law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian, sequestrator, conservator, examiner, liquidator, rehabilitator or other similar official for it or for any substantial part of its property and assets and, in the case of any such proceeding instituted against such Person, such proceeding shall remain undismissed or unstayed for a period of thirty (30) days; (iii) any Loan Party or any Subsidiary thereof shall consent to the institution of, fail to contest in a timely and appropriate manner, or file an answer admitting the material allegations in any proceeding or the filing of any petition described above; or (iv) any Loan Party or any Subsidiary thereof shall take any corporate or other action (as applicable), to authorize any of the actions set forth above in this Section 6.01(f);
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(g) (i) any Loan Party shall deny its obligations under this Agreement or any other Facility Document (to which it is a party), (ii) any Law shall purport to render invalid, or preclude enforcement of, any material provision of this Agreement or any other Facility Document or impair performance of the obligations hereunder or under any other Facility Document of any Loan Party, or (ii) any material provision of any Facility Document, after delivery thereof in accordance with the terms hereof or of any other Facility Document, shall for any reason cease to be valid and binding upon, or enforceable against any Loan Party; or
(h) (i) any security interest created by any Collateral Document ceases to be in full force and effect (except as permitted by the terms of this Agreement or the Collateral Documents); provided that, such cessation, individually or in the aggregate, results in Collateral having a Fair Market Value in excess of $10,000,000 not being subject to a valid, perfected security interest or (ii) except as permitted by this Agreement, any Guarantee of the Obligations shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Guarantee of the Obligations;
(i) there shall occur one or more ERISA Events which ERISA Event or ERISA Events individually or in the aggregate, results in or would reasonably be expected to result in liability in excess of $10,000,000; or
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(j) a Change of Control shall have occurred and be continuing;
then, (i) upon the occurrence of any Event of Default described in Section 6.01(f), automatically, and (ii) upon the occurrence of any other Event of Default, at the request of (or with the consent of) Required Lenders or the Administrative Agent, (A) the Commitments, if any, of each Lender having such Commitments shall immediately terminate; (B) each of the following shall immediately become due and payable, in each case without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by each Loan Party: (I) the unpaid principal amount of and accrued interest on the Loans and (II) all other Obligations; (C) the Administrative Agent may cause the Collateral Agent to enforce any and all Liens and security interests created pursuant to Collateral Documents; and (D) the Administrative Agent and the Collateral Agent may exercise on behalf of themselves, the Lenders and the other Secured Parties all rights and remedies available to the Administrative Agent, the Collateral Agent and the Lenders under the Facility Documents or under applicable Law or in equity. In addition, upon the acceleration of any portion of the principal amount of the Loans in connection with an Event of Default (whether under Section 6.01(f) or otherwise), an amount equal to the Prepayment Premium that would have been payable in connection with a voluntary prepayment of the Loans at the time of the occurrence of such acceleration will become and be immediately due and payable with respect to the principal amount of the Loans so accelerated without any declaration or other act on the part of the Agents or Lenders and shall constitute part of the Obligations in view of the impracticability and difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each holder’s lost profits as a result thereof. The amounts described in the preceding sentence are intended to be liquidated damages and not unmatured interest or a penalty and the Borrower and the other Loan Parties agree that it is reasonable under the circumstances currently existing. If a Prepayment Premium becomes due and payable pursuant to the second preceding sentence, such Prepayment Premium shall be deemed to be principal of the Loans and interest shall accrue on the full principal amount of the Loans (including the Prepayment Premium) from and after such acceleration. Such Prepayment Premium shall also be payable (A) in the event the Loans are satisfied, released or discharged (in whole or in part) through foreclosure (whether by judicial proceeding, deed in lieu of foreclosure or by any other means), any sale of the Collateral or any other exercise of remedies by any of the Agents or the Lenders, in each case following the occurrence of an Event of Default or (B) in connection with any other restructuring, reorganization or compromise of the Obligations or termination of the Facility Documents. THE BORROWER AND THE OTHER LOAN PARTIES EXPRESSLY WAIVE (TO THE FULLEST EXTENT THEY MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF SUCH PREPAYMENT PREMIUM IN CONNECTION WITH ANY SUCH ACCELERATION. The Borrower and the other Loan Parties expressly agree (to the fullest extent they may lawfully do so) that: (A) such Prepayment Premium is reasonable and is the product of an arm’s length transaction between sophisticated business entities ably represented by counsel; (B) such Prepayment Premium shall be payable notwithstanding the then prevailing market rates at the time acceleration occurs; (C) there has been a course of conduct between the Lenders, the Borrower and the other Loan Parties giving specific consideration in this transaction for such agreement to pay such Prepayment Premium; and (D) the Borrower and the other Loan Parties shall be estopped hereafter from claiming differently than as agreed to in this paragraph. The Borrower and the other Loan Parties expressly acknowledge that the agreement to pay such Prepayment Premium is a material inducement to the Lenders to make the Loans.
Article VII
GUARANTY
Section 7.01 The Guaranty. Each Guarantor, jointly and severally, hereby Guarantees to the Secured Parties and their respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of all of the Obligations (such obligations being herein collectively called the “Guaranteed Obligations”); provided that the Guaranteed Obligations of a Guarantor shall exclude any Excluded Swap Obligations with respect to such Guarantor. Each Guarantor hereby agrees that if the Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, each Guarantor will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.
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Section 7.02 Obligations Unconditional. The obligations of each Guarantor under Section 7.01 are absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Borrower under this Agreement or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other Guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable Law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 7.02 that the obligations of each Guarantor hereunder shall be absolute and unconditional under any and all circumstances. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor, which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to such Guarantor, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of this Agreement or any other agreement or instrument referred to herein shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right under this Agreement or any other agreement or instrument referred to herein shall be waived or any other Guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or
(d) any lien or security interest granted in favor of Collateral Agent for the benefit of the Secured Parties as security for any of the Guaranteed Obligations shall fail to be perfected.
Each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Secured Parties exhaust any right, power or remedy or proceed against the Borrower under this Agreement or any other agreement or instrument referred to herein, or against any other Person under any other Guarantee of, or security for, any of the Guaranteed Obligations, and each Guarantor agrees that any consent by the Administrative Agent or the Lenders hereunder shall be effective only in the specific instance and for the specific purpose for which it is given.
Section 7.03 Reinstatement. The obligations of each Guarantor under this Article shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower or any Guarantor in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and each Guarantor agrees that it will indemnify each Secured Party on demand for all reasonable costs and expenses (including without limitation reasonable and documented fees, charges and disbursements of counsel) incurred by each Secured Party in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar Law.
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Section 7.04 Subordination and Subrogation. Unless and until the Guaranteed Obligations have been paid in full, all rights of each Guarantor against the Borrower with respect to the Guarantee in Section 7.01 shall be subordinated to such payment in full and each Guarantor agrees not to assert any right of subrogation and any right to enforce any remedy which any Secured Party now has or may hereafter have against the Borrower, any endorser or any other guarantor of all or any part of the Guaranteed Obligations until the Guaranteed Obligations are paid in full, and each Guarantor hereby subordinates any benefit of, and any right to participate in, any security or Collateral given to Collateral Agent on behalf of the Secured Parties to secure payment of the Guaranteed Obligations or any other liability of the Borrower to Lenders until the Guaranteed Obligations are paid in full.
Section 7.05 Remedies. Each Guarantor agrees that, as between such Guarantor and the Secured Parties, the obligations of the Borrower under this Agreement may be declared to be forthwith due and payable as provided in Article VI (and shall be deemed to have become automatically due and payable in the circumstances provided in Article VI, without notice or other action on the part of any Secured Party and regardless of whether payment of such obligations has then been accelerated) for purposes of Section 7.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Borrower) shall forthwith become due and payable by such Guarantor for purposes of Section 7.01.
Section 7.06 Continuing Guarantee. The Guarantee in this Article VII is a continuing Guarantee, and shall remain in full force and effect until (i) the termination of all Commitments and final payment in full of the Guaranteed Obligations and all other amounts payable under any other Facility Document (in each case other than the Additional Secured Obligations and any contingent indemnification obligations or expense reimbursement claims not then due) or (ii) with respect to any Person, if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder (other than upon the basis of such Person ceasing to be a Subsidiary as a result of a transaction with the primary intention to release such Subsidiary from its Guarantee in this Article VII).
Section 7.07 General Limitation on Guaranteed Obligations. In any action or proceeding involving any state corporate Law, or any state or Federal bankruptcy, insolvency, reorganization or other Law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 7.01 would otherwise be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 7.01, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Guarantor or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.
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Section 7.08 Contribution by Guarantors. All Guarantors desire to allocate among themselves (collectively, the “Contributing Guarantors”), in a fair and equitable manner, their obligations arising under this Guarantee. Accordingly, in the event any payment or distribution is made on any date by a Guarantor (a “Funding Guarantor”) under this Guarantee such that its Aggregate Payments exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled to a contribution from each of the other Contributing Guarantors in an amount sufficient to cause each Contributing Guarantor’s Aggregate Payments to equal its Fair Share as of such date. “Fair Share” means, with respect to a Contributing Guarantor as of any date of determination, an amount equal to (a) the ratio of (i) the Fair Share Contribution Amount with respect to such Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution Amounts with respect to all Contributing Guarantors multiplied by (b) the aggregate amount paid or distributed on or before such date by all Funding Guarantors under this Guarantee in respect of the obligations Guaranteed. “Fair Share Contribution Amount” means, with respect to a Contributing Guarantor as of any date of determination, the maximum aggregate amount of the obligations of such Contributing Guarantor under this Guarantee that would not render its obligations hereunder or thereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the Code or any comparable applicable provisions of state law; provided that solely for purposes of calculating the Fair Share Contribution Amount with respect to any Contributing Guarantor for purposes of this Section 7.08, any assets or liabilities of such Contributing Guarantor arising by virtue of any rights to subrogation, reimbursement or indemnification or any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Contributing Guarantor. “Aggregate Payments” means, with respect to a Contributing Guarantor as of any date of determination, an amount equal to (1) the aggregate amount of all payments and distributions made on or before such date by such Contributing Guarantor in respect of this Guarantee (including in respect of this Section 7.08), minus (2) the aggregate amount of all payments received on or before such date by such Contributing Guarantor from the other Contributing Guarantors as contributions under this Section 7.08. The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Funding Guarantor. The allocation among Contributing Guarantors of their obligations as set forth in this Section 7.08 shall not be construed in any way to limit the liability of any Contributing Guarantor hereunder. Each Guarantor is a third party beneficiary to the contribution agreement set forth in this Section 7.08.
Section 7.09 Additional Guarantors. If (i) the Borrower or any of its Subsidiaries shall acquire or create, or there shall exist, another Domestic Subsidiary (other than a Receivables Entity or Loan SPV) after the Closing Date or (ii) any Foreign Subsidiary of the Borrower guarantees (or otherwise becomes liable for) Indebtedness of the Borrower or any Guarantor, then the Borrower will cause such Subsidiary to become a Guarantor hereunder and:
(a) execute a Counterpart Agreement substantially in the form of Exhibit E, in accordance with the terms of this Agreement, pursuant to which such Subsidiary shall unconditionally Guarantee, on a senior secured basis, all of the Obligations on the terms set forth in this Agreement;
(b) execute and deliver to the Collateral Agent such amendments or supplements to the Collateral Documents necessary in order to grant to the Collateral Agent, for the benefit of the Secured Parties, a perfected security interest in the Equity Interests of such Subsidiary, subject to Permitted Liens and the Intercreditor Agreement, which are owned by the Borrower or a Guarantor and are required to be pledged pursuant to the Collateral Documents;
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(c) take such actions as are necessary to grant to the Collateral Agent for the benefit of the Secured Parties a perfected security interest in the assets of such Subsidiary, other than Excluded Assets and subject to Permitted Liens and the Intercreditor Agreements, including the filing of UCC financing statements, in each case as may be required by the Collateral Documents;
(d) take such further action and execute and deliver such other documents specified in the Collateral Documents or as otherwise may be reasonably requested by the Collateral Agent to give effect to the foregoing; and
(e) deliver to the Collateral Agent an Opinion of Counsel that (i) such Counterpart Agreement and any other documents required to be delivered have been duly authorized, executed and delivered by such Subsidiary and constitute legal, valid, binding and enforceable obligations of such Subsidiary and (ii) the Collateral Documents to which such Subsidiary is a party create a valid perfected Lien on the Collateral covered thereby.
By execution of this Agreement as a Guarantor, the Borrower covenants and agrees to perform its obligations under this Section 7.09.
Section 7.10 Keepwell. Each Loan Party that is a Qualified ECP Guarantor at the time the Guarantee or the grant of a Lien under the Facility Documents, in each case, by any Specified Loan Party becomes effective with respect to any Swap Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Loan Party with respect to such Swap Obligation as may be needed by such Specified Loan Party from time to time to honor all of its obligations under the Facility Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations and undertakings under this Article VII voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section shall remain in full force and effect until the Obligations have been indefeasibly paid and performed in full. Each Loan Party intends this Section 7.10 to constitute, and this Section 7.10 shall be deemed to constitute, a Guarantee of the obligations of, and a “keepwell, support, or other agreement” for the benefit of, each Specified Loan Party for all purposes of the Commodity Exchange Act.
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Article VIII
AGENTS
Section 8.01 Authorization and Authority. Each Lender hereby irrevocably appoints, designates and authorizes Alter Domus (US) LLC as Administrative Agent and as Collateral Agent, in each case, to take such actions on its behalf under the provisions of this Agreement and under each other Facility Document and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms of this Agreement or any other Facility Document, together with such actions and powers as are reasonably incidental thereto. In furtherance of the foregoing, each Lender (in its capacity as a Lender and on behalf of itself and its Affiliates as potential counterparties to Cash Management Obligations or Secured Hedging Obligations) hereby appoints and authorizes the Collateral Agent to act as the agent of such Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, neither the Administrative Agent nor the Collateral Agent shall have any duties or responsibilities, except those expressly set forth herein or in the other Facility Documents, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Facility Document or otherwise exist against the Administrative Agent or the Collateral Agent. The provisions of this Article VIII are solely for the benefit of Agents and Lenders, and no Loan Party shall have rights as a third party beneficiary or otherwise of any of such provisions.
Section 8.02 Agent Individually. Each Lender understands that each Agent, acting in its individual capacity, and its Affiliates are engaged in a wide range of financial services and businesses (including investment management, financing, securities trading, corporate and investment banking and research) (such services and businesses are collectively referred to in this Section 8.02 as “Activities”) and may engage in the Activities with or on behalf of the Borrower or its Affiliates. Furthermore, Agents and their respective Affiliates may, in undertaking the Activities, engage in trading in financial products or undertake other investment businesses for its own account or on behalf of others (including the Borrower and its Affiliates and including holding, for its own account or on behalf of others, equity, debt and similar positions in the Borrower or its Affiliates).
Section 8.03 Duties of Agents; Exculpatory Provisions.
(a) An Agent’s duties hereunder and under any other Facility Document are solely ministerial and administrative in nature and no Agent shall have any duties or obligations except those expressly set forth herein or therein. Without limiting the generality of the foregoing, an Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, but shall be required to act or refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the written direction of the Required Lenders, provided that an Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent or any of its Affiliates to liability or that is contrary to this Agreement or applicable Law.
(b) No Agent shall be liable (nor shall any Lender or Loan Party have any right of action whatsoever against any Agent) for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances) or (ii) in the absence of its own gross negligence or willful misconduct. No Agent shall be deemed to have knowledge of any Default or Event of Default or the event or events that give or may give rise to any Default or Event of Default unless and until a Loan Party or any Lender shall have given written notice to such Agent describing such Default or Event of Default and such event or events.
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(c) No Agent nor any of its Affiliates shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty, representation or other information made or supplied in or in connection with this Agreement or any other Facility Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith or the adequacy, accuracy and/or completeness of the information contained therein, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Facility Document or any other agreement, instrument or document or the perfection or priority of any Lien or security interest created or purported to be created hereby or thereby or (v) the satisfaction of any condition set forth in Article III or elsewhere herein, other than (but subject to the foregoing clause (ii)) to confirm receipt of items expressly required to be delivered to an Agent.
Section 8.04 Reliance by Agent. Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Each Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. Each Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. Each Agent shall be fully justified in failing or refusing to take any action under any Facility Documents unless it shall first receive the advice or concurrence of the Required Lenders and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Facility Document in accordance with a request or consent of the Required Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Secured Parties. Notwithstanding the foregoing, no Agent shall be required to take, or to omit to take, any action that is, in the opinion of such Agent or its counsel, contrary to any Facility Document or applicable requirement of law. For purposes of determining compliance with the conditions specified in Sections 3.01 and 3.02, each Lender that has signed this Agreement (or an addendum or joinder to this Agreement) shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date or the date on which a Loan has been requested to be made, as applicable, specifying its objection thereto.
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The Agents are not obliged to expend or risk their own funds or otherwise incur any financial liability in the performance of their duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if they have grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to them. The Agents shall not be responsible for any unsuitability, inadequacy, expiration or unfitness of any security interest created hereunder or pursuant to any other security documents pertaining to this matter nor shall it be obligated to make any investigation into, and shall be entitled to assume, the adequacy and fitness of any security interest created hereunder or pursuant to any other security document pertaining to this matter. In no event shall the Agents be liable for any indirect, special, punitive or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, even if such loss or damage was foreseeable or it has been advised of the likelihood of such loss or damage and regardless of the form of action. In no event shall the Agents be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services.
Section 8.05 Delegation of Duties. An Agent may perform any and all of its duties and exercise its rights and powers under this Agreement or under any other Facility Documents by or through any one or more sub-agents appointed by such Agent, and such Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties; provided that in each case that no such delegation to a sub-agent or a Related Party shall release such Agent from any of its obligations hereunder. Each such sub-agent and the Related Parties of such Agent and each such sub-agent shall be entitled to the benefits of all provisions of this Article VIII and Section 9.04 (as though such sub-agents were the “Agent” hereunder and under the other Facility Documents) as if set forth in full herein with respect thereto.
Section 8.06 Resignation of Agent. An Agent may at any time give notice of its resignation to the Lenders and the Borrower. The Required Lenders may remove an Agent by giving notice thereof to the Lenders, the Agents and the Borrower. Upon receipt of any such notice of resignation or delivery of such notice of removal, the Required Lenders shall have the right (in consultation with the Borrower) to appoint a successor Agent. If no such successor Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring or removed Agent gives notice of its resignation or the Required Lenders deliver notice of removal (such 30 day period, the “Lender Appointment Period”), then the retiring or removed Agent may on behalf of Lenders appoint a successor Agent meeting the qualifications set forth above. In addition and without any obligation on the part of the retiring or removed Agent to appoint, on behalf of Lenders, a successor Agent, the retiring or removed Agent may at any time upon or after the end of the Lender Appointment Period notify the Borrower and Lenders that no qualifying Person has accepted appointment as successor Agent and the effective date of such retiring or removed Agent’s resignation which effective date shall be no earlier than three (3) Business Days after the date of such notice. Upon the resignation effective date established in such notice and regardless of whether a successor Agent has been appointed and accepted such appointment, the retiring or removed Agent’s resignation shall nonetheless become effective and (i) the retiring or removed Agent shall be discharged from its duties and obligations as Agent hereunder and under the other Facility Documents (except in the case of any collateral security held by the Collateral Agent on behalf of the Lenders under the Facility Documents, the retiring or removed Collateral Agent shall continue to hold such collateral security until such time as a successor Collateral Agent is appointed) and (ii) all payments, communications and determinations provided to be made by, to or through such Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Agent as provided for above in this paragraph. Upon the acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties as Agent of the retiring or removed Agent, and the retiring or removed Agent shall be discharged from all of its duties and obligations as Agent hereunder and/or under the other Facility Documents. The fees payable by the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Agent’s resignation hereunder and under the other Facility Documents, the provisions of this Article VIII and Section 9.04 shall continue in effect for the benefit of such retiring or removed Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Agent was acting as Agent.
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Section 8.07 Non-Reliance on Agent.
(a) Each Lender (including its Related Parties) acknowledges that each Agent has not made any representation or warranty to it, and that no act by any Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Loan Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent to such Lender as to any matter, including whether any Agent has disclosed material information in its possession. Each Lender (including its Related Parties) confirms to each Agent that it (i) possesses (individually or through its Related Parties) such knowledge and experience in financial and business matters that it is capable, without reliance on any Agent or any of its Related Parties, of evaluating the merits and risks (including tax, legal, regulatory, credit, accounting and other financial matters) of (x) entering into this Agreement, (y) making its portion of the Loans and (z) taking or not taking actions hereunder, (ii) is financially able to bear such risks and (iii) has, independently and without reliance upon any Agent or any of its Related Parties and based upon such documents and information as it has deemed appropriate, determined that entering into this Agreement and making its portion of the Loans is suitable and appropriate for it.
(b) Each Lender acknowledges that (i) it is solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with this Agreement and the other Facility Documents, (ii) it has, independently and without reliance upon any Agent or any of its Related Parties, made its own appraisal and investigation of all risks associated with, and its own credit analysis and decision to enter into, this Agreement based on such documents and information as it has deemed appropriate and (iii) it will, independently and without reliance upon any Agent or any of its Related Parties, continue to be solely responsible for making its own appraisal and investigation of all risks arising under or in connection with, and its own credit analysis and decision to take or not take action under, this Agreement and the other Facility Documents based on such documents and information as it shall from time to time deem appropriate, which may include, in each case:
(i) the financial condition, status and capitalization of the Borrower;
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(ii) the legality, validity, effectiveness, adequacy or enforceability of this Agreement and the other Facility Documents and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with this Agreement;
(iii) determining compliance or non-compliance with any condition hereunder to the making of a Loan and the form and substance of all evidence delivered in connection with establishing the satisfaction of each such condition; and
(iv) the adequacy, accuracy and/or completeness of any other information delivered by any Agent or by any of their respective Related Parties under or in connection with this Agreement, the other Facility Documents, the Transactions contemplated hereby and thereby or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with this Agreement
Section 8.08 Collateral and Guarantee Matters.
(a) Each Lender hereby further authorizes each Agent, as applicable, on behalf of and for the benefit of the Secured Parties, to be the agent for and representative of the Secured Parties with respect to the Guarantee hereunder, the Collateral Documents and the other Facility Documents. Without further written consent or authorization from Lenders, the Administrative Agent or Collateral Agent, as applicable, shall (and the Lenders hereby authorize and direct the Administrative Agent and Collateral Agent to), at the request and cost of the Borrower, execute any documents or instruments necessary to release (i) any Guarantor from its obligations under the Facility Documents in the circumstances for such release set forth in clauses (i) and (ii) of Section 7.06 and (ii) any Lien encumbering any item of Collateral that either (A) is the subject of a Disposition to a Person other than a Loan Party permitted under the Facility Documents, (B) is or becomes Excluded Assets or (C) is owned by a Person whose obligations under the Facility Documents are released pursuant to clause (i) of this Section 8.08(a); provided, that in each case the Administrative Agent or the Collateral Agent, as applicable, shall have received a certificate of an Authorized Officer of the Borrower containing such certifications as the Administrative Agent or the Collateral Agent, as applicable, shall reasonably request. Any such release shall be deemed subject to Section 7.03 and any similar provision of any Collateral Document. The Borrower agrees to pay all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent or the Collateral Agent (and their respective representatives) in connection with taking such actions to release security interests in Collateral and obligations under the Facility Documents as contemplated by this Section 8.08(a). Additional Secured Obligations shall be secured and guaranteed pursuant to the Collateral Documents only to the extent that, and for so long as, the other Obligations are so secured and guaranteed. No person shall have any voting rights under any Facility Document solely as a result of the existence of Additional Secured Obligations owed to it. For the avoidance of doubt, no release of Collateral or Guarantors effected in the manner permitted by this Agreement shall require the consent of any holder of Additional Secured Obligations (in such capacity).
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(b) The Lenders and the other Secured Parties hereby irrevocably authorize and instruct the Administrative Agent and the Collateral Agent to, without any further consent of any Lender or any other Secured Party, enter into (or acknowledge and consent to) or amend, renew, extend, supplement, restate, replace, waive or otherwise modify the Intercreditor Agreement in order to permit the granting of Liens that are, and that have priority, expressly permitted by the terms of this Agreement. The foregoing provisions are intended as an inducement to any provider of any Indebtedness not prohibited by Section 5.18 hereof to extend credit to the Loan Parties and such persons are intended third-party beneficiaries of such provisions.
(c) Anything contained in any Facility Document to the contrary notwithstanding, the Borrower, Administrative Agent, Collateral Agent and each Secured Party hereby agree that (i) no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee hereunder, it being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by Administrative Agent, on behalf of a Secured Party in accordance with the terms hereof and all powers, rights and remedies under the Collateral Documents may be exercised solely by Collateral Agent and (ii) in the event of a foreclosure by Collateral Agent on any of the Collateral pursuant to a public or private sale, Collateral Agent or any Secured Party may be the purchaser of any or all of such Collateral at any such sale and Collateral Agent, as agent for and representative of Secured Parties (but not any Lender or Lenders in its or their respective individual capacities unless Required Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations as a credit on account of the purchase price for any Collateral payable by Collateral Agent at such sale.
Section 8.09 Right to Indemnity. Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify each Agent upon demand to the extent that such Agent shall not have been reimbursed by any Loan Party (and without limiting its obligation to do so), for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against such Agent in exercising its powers, rights and remedies or performing its duties hereunder or under the other Facility Documents or otherwise in its capacity as such Agent in any way relating to or arising out of this Agreement or the other Facility Documents; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s gross negligence or willful misconduct, as determined by a final, non-appealable judgment of a court of competent jurisdiction. If any indemnity furnished to any Agent for any purpose shall, in the opinion of such Agent be insufficient or become impaired, such Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished; provided that in no event shall this sentence require any Lender to indemnify any Agent against any liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement in excess of such Lender’s Pro Rata Share thereof; provided, further, that this sentence shall not be deemed to require any Lender to indemnify any Agent against any liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement described in the proviso in the immediately preceding sentence.
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Section 8.10 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under the Bankruptcy Code or other applicable Law or any other judicial proceeding relative to the Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the other Secured Parties (including fees, disbursements and other expenses of counsel) allowed in such judicial proceeding and (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same. Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and other Secured Party to make such payments to the Administrative Agent. Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or other Secured Party any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or other Secured Party to authorize the Administrative Agent to vote in respect of the claim of such Person or in any such proceeding.
Article IX
MISCELLANEOUS
Section 9.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Facility Document, and no consent to any departure by the Borrower or Guarantor therefrom, shall be effective unless in writing signed by the Required Lenders (provided that any Defaulting Lender shall be deemed not to be a “Lender” for purposes of calculating the Required Lenders (including the granting of any consents or waivers) with respect to any of the Facility Documents) and the Borrower and the applicable Loan Parties and acknowledged by Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no amendment, waiver or consent shall, unless in writing and signed by each Lender that would be directly and adversely affected thereby, the Administrative Agent and/or the Collateral Agent, as the case may be, do any of the following: (a) reduce or forgive the principal of, or interest (or the rate of interest) on, any Loan or any other amounts payable hereunder, (b) postpone any date fixed for any payment of principal of, or interest on, any Loan or any other amounts payable hereunder or waive any demand for any such payment, (c) increase any Commitment of any Lender over the amount thereof then in effect or extend the outside date for such Commitment, (d) release all or substantially all of the value of the Guarantee hereunder or release all or substantially all of the Collateral, subordinate the Obligations or any Guarantees thereof to any other Indebtedness (including other Obligations) or subordinate the Secured Parties’ Liens on the Collateral, (e) amend the definition of “Required Lenders,” “Ad Hoc Group,” “Required Ad Hoc Group Lenders” or this Section 9.01 or otherwise change the percentage of the Commitments or the aggregate unpaid principal amount of the Loans or the number of Lenders that shall be required for Lenders or any of them to take any action hereunder or (f) amend the definition of “Pro Rata Share” or otherwise alter the pro rata sharing of payments required hereby; provided, further that no amendment, waiver or consent shall, unless in writing and signed by the relevant Agent in addition to the Lenders required above to take such action, affect the rights or duties of such Agent under this Agreement or any other Facility Document.
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In addition, notwithstanding anything else to the contrary contained in this Section 9.01, (a) if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical nature, in each case, in any provision of the Facility Documents, then the Administrative Agent and the Borrower shall be permitted to amend such provision and (b) the Administrative Agent and the Borrower shall be permitted to amend any provision of any Collateral Document to better implement the intentions of this Agreement and the other Facility Documents, and in each case, such amendments shall become effective without any further action or consent of any other party to any Facility Document if the same is not objected to in writing by the Required Lenders within five (5) Business Days following receipt of notice thereof.
Section 9.02 Notices, Etc.
(a) Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by electronic mail, to the Borrower and each Agent at the addresses (or electronic mailing address) set forth below. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received. Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in such paragraph (b).
If to the Borrower:
CURO Group Holdings Corp.
200 W. Hubbard Street, 8th Flr
Chicago, IL 60654
Attention: Legal Department
Electronic Mailing Address: BeccaFox@curo.com; legaldept@curo.com
With a copy (which shall not constitute notice) to:
KIRKLAND & ELLIS LLP
2049 Century Park East, Suite 3700, Los Angeles, CA 90067
Electronic Mailing Address: david.nemecek@kirkland.com; jacob.ruby@kirkland.com; jennifer.mcwhaw@kirkland.com
Attention: David M. Nemecek, P.C., Jacob Ruby, Jennifer McWhaw
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If to the Administrative Agent or Collateral Agent:
Alter Domus (US) LLC
225 W. Washington, 9th Fl
Chicago, IL 60606
Email: Legal_agency@alterdomus.com; CPCagency@alterdomus.com
Attention: Olivia Otis
With a copy (which shall not constitute notice) to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Email: [***]
Attention: [***]
(b) Notices and other communications to any Agent and the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by such Agent and the Lenders; provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. Each Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that, except as otherwise expressly set forth herein, if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefore.
(c) Change of Address, Etc. Any party hereto may change its address or electronic mailing address for notices and other communications hereunder by notice to the other parties hereto.
Section 9.03 No Waiver; Remedies. No failure on the part of any Agent or Lender to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder, or under any other Facility Document shall operate as a waiver thereof nor shall the single or partial exercise, of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by Law. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Lender or Agent to any other or further action in any circumstances without notice or demand.
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Section 9.04 Costs, Expenses and Indemnification.
(a) Costs and Expenses. The Borrower agrees to pay and reimburse all reasonable and documented out-of-pocket costs and expenses, if any (including, but not limited to, counsel fees and expenses, consultant fees and due diligence expenses), incurred by (i) each Agent and each of their respective Affiliates and (ii) the Ad Hoc Group (including the fees and expenses of Wachtell, Lipton, Rosen & Katz, counsel to the Ad Hoc Group, and Houlihan Lokey, financial advisor to the Ad Hoc Group) in connection with the preparation, negotiation, execution, delivery, administration, modification and supplementation of this Agreement, the Collateral Documents, the other Facility Documents and Collateral. The Borrower further agrees to pay all reasonable and documented out-of-pocket costs and expenses, if any (including, but not limited to, counsel fees and expenses), incurred by each Agent and Lender and each of their respective Affiliates in connection the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Collateral Documents, the other Facility Documents and the other documents to be delivered hereunder or in respect of the transactions contemplated hereby, including, but not limited to, counsel fees and expenses in connection with the enforcement of rights under this Section 9.04(a) and under any other Facility Document.
(b) Indemnification by the Borrower. The Borrower shall indemnify each Agent and Lender (including the members of the Ad Hoc Group) and each of their respective Related Parties (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, obligations, penalties, actions, judgments, charges, liabilities and related expenses (including the reasonable and documented fees, charges and disbursements of counsel, which in the absence of any conflicts, may be limited to one counsel and one local counsel in any applicable jurisdiction and additional counsel as necessary due to actual conflicts of interest among such Indemnitees) incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any Related Party of the Borrower arising out of, in connection with, or as a result of (i) this Agreement, any other Facility Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the Transactions contemplated hereby or thereby, (ii) the Loans or the use or proposed use of the proceeds therefrom, any claims, investigations, non-compliance, sanction or other actions with respect to such Loan, including any actions by the SEC or any Governmental Authority, (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Related Party of the Borrower, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (A) are determined by a court of competent jurisdiction in a final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee, or (B) arise from disputes between or among Indemnitees that do not involve an act or omission by the Loan Parties or their Subsidiaries, other than any proceeding against the Administrative Agent, or Collateral.
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(c) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Law, the Loan Parties shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefore is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, or as a result of, this Agreement, any other Facility Document or any agreement or instrument contemplated hereby, the Transactions contemplated hereby or thereby, the Loans or the use of the proceeds thereof. No Indemnitee referred to in clause (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Facility Documents or the Transactions contemplated hereby or thereby.
(d) Payments. All amounts due under this Section 9.04 shall be payable within ten (10) days of demand by any Lender or Agent, as applicable, unless provided otherwise above.
Section 9.05 Successors and Assigns; Participations.
(a) Generally. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lenders. Except as permitted by Section 5.19, no Loan Party’s rights or obligations hereunder nor any interest therein may be assigned or delegated by any Loan Party without the prior written consent of all Lenders (and any purported assignment or delegation without such consent shall be null and void).
(b) Register. The Borrower, the Administrative Agent and Lenders shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Commitments and Loans listed therein for all purposes hereof, and no assignment or transfer of any such Commitment or Loan shall be effective, in each case, unless and until recorded in the Register following receipt of a fully executed Assignment Agreement effecting the assignment or transfer thereof, together with the required forms and certificates regarding tax matters and any fees payable in connection with such assignment, in each case, as provided in Section 9.05(d). Each assignment shall be recorded in the Register promptly following receipt by the Administrative Agent of the fully executed Assignment Agreement and all other necessary documents and approvals, prompt notice thereof shall be provided to the Borrower and a copy of such Assignment Agreement shall be maintained, as applicable. The date of such recordation of a transfer shall be referred to herein as the “Assignment Effective Date”. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Commitments or Loans.
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(c) Right to Assign. Each Lender shall have the right at any time to sell, assign or transfer all or a portion of its rights and obligations under this Agreement, including all or a portion of its Commitment or Loans owing to it or other Obligations (provided, that pro rata assignments shall not be required and each assignment shall be of a uniform, and not varying, percentage of all rights and obligations under and in respect of any applicable Loan and any related Commitments):
(i) to any Person meeting the criteria of clause (i) of the definition of the term of “Eligible Assignee” upon the giving of notice to the Borrower and the Administrative Agent; and
(ii) to any Person meeting the criteria of clause (ii) of the definition of the term of “Eligible Assignee” upon such Person being consented to by each of the Borrower (provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) days after having received notice thereof) and the Administrative Agent (such consents not to be (x) unreasonably withheld or delayed or (y) in the case of the Borrower, required at any time an Event of Default has occurred and is continuing); provided, further that each such assignment pursuant to this Section 9.05(c)(ii) shall be in an aggregate amount of not less than $1,000,000 (or such lesser amount as may be agreed to by the Borrower and the Administrative Agent or as shall constitute the aggregate amount of the Commitments and Loans of the assigning Lender).
(d) Mechanics. Assignments and assumptions of Loans and Commitments by Lenders shall be effected by manual execution and delivery to the Administrative Agent of an Assignment Agreement. Assignments made pursuant to the foregoing provision shall be effective as of the Assignment Effective Date. In connection with all assignments there shall be delivered to the Administrative Agent such forms, certificates or other evidence, if any, with respect to United States federal income Tax withholding matters as the assignee under such Assignment Agreement may be required to deliver pursuant to Section 2.19(c), together with payment to the Administrative Agent of a registration and processing fee of $3,500 (except that no such registration and processing fee shall be payable in the case of an Eligible Assignee which is already a Lender or is an Affiliate of a Lender or a Person under common management with a Lender). Furthermore, in connection with all assignments (except in the case of an Eligible Assignee which is already a Lender) there shall be delivered to the Administrative Agent a completed Administrative Questionnaire in the form of Exhibit H.
(e) Representations and Warranties of Assignee. Each Lender, upon execution and delivery hereof or upon succeeding to an interest in the Commitments and Loans, as the case may be, represents and warrants as of the Closing Date or as of the Assignment Effective Date that (i) it is an Eligible Assignee; (ii) it has experience and expertise in the making of or investing in commitments or loans such as the applicable Commitments or Loans, as the case may be; and (iii) it shall make or invest in, as the case may be, its Commitments or Loans for its own account in the ordinary course and without a view to distribution of such Commitments or Loans within the meaning of the Securities Act or the Exchange Act or other federal securities laws (it being understood that, subject to the provisions of this Section 9.05, the disposition of such Commitments or Loans or any interests therein shall at all times remain within its exclusive control).
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(f) Effect of Assignment. Subject to the terms and conditions of this Section 9.05, as of the “Assignment Effective Date” (i) the assignee thereunder shall have the rights and obligations of a “Lender” hereunder to the extent of its interest in the Loans and Commitments as reflected in the Register and shall thereafter be a party hereto and a “Lender” for all purposes hereof; (ii) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned to the assignee, relinquish its rights (other than any rights which survive the termination hereof, including under Section 9.09) and be released from its obligations hereunder (and, in the case of an assignment covering all or the remaining portion of an assigning Lender’s rights and obligations hereunder, such Lender shall cease to be a party hereto on the Assignment Effective Date; provided, that anything contained in any of the Facility Documents to the contrary notwithstanding, such assigning Lender shall continue to be entitled to the benefit of all indemnities hereunder as specified herein with respect to matters arising out of the prior involvement of such assigning Lender as a Lender hereunder); (iii) the Commitments shall be modified to reflect any Commitment of such assignee and any Commitment of such assigning Lender, if any; and (iv) if any such assignment occurs after the issuance of any Note hereunder, the assigning Lender shall, upon the effectiveness of such assignment or as promptly thereafter as practicable, surrender its applicable Notes to the Administrative Agent for cancellation, and thereupon the Borrower shall issue and deliver new Notes, if so requested by the assignee and/or assigning Lender, to such assignee and/or to such assigning Lender, with appropriate insertions, to reflect the new Commitments and/or outstanding Loans of the assignee and/or the assigning Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply the requirements of this Section 9.05 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 9.05(g). Any assignment by a Lender pursuant to this Section 9.05 shall not in any way constitute or be deemed to constitute a novation, discharge, rescission, extinguishment or substitution of the Indebtedness hereunder, and any Indebtedness so assigned shall continue to be the same obligation and not a new obligation.
(g) Participations.
(i) Each Lender shall have the right at any time to sell one or more participations to any Eligible Assignee (in such capacity a “Participant”) in all or any part of its Commitments, Loans or in any other Obligation.
(ii) The holder of any such participation, other than an Affiliate of the Lender granting such participation, shall not be entitled to require such Lender to take or omit to take any action hereunder except with respect to any amendment, modification or waiver that both (A) requires the consent each Lender that would be directly and adversely affected thereby pursuant to Section 9.01 and (B) directly and adversely affects such Participant.
(iii) The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.18 and 2.19 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to this Section 9.05; provided that (x) a Participant shall not be entitled to receive any greater payment under Sections 2.18 and 2.19 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless (A) and to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation or (B) the sale of the participation to such Participant is made with the Borrower’s prior written consent and (y) a Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.19 unless such Participant agrees to comply with Section 2.19 as though it were a Lender; provided, further, that, except as specifically set forth in clauses (x) and (y) of this sentence, nothing herein shall require any notice to the Borrower or any other Person in connection with the sale of any participation. To the extent permitted by law, each Participant shall also be entitled to the benefits of Section 9.12 as though it were a Lender; provided, that such Participant agrees to be subject to Section 2.16 as though it were a Lender.
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(iv) Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Facility Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a Participant’s interest in any Commitments, Loans, or its other Obligations under any Facility Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(h) Certain Other Assignments and Participations. In addition to any other assignment or participation permitted pursuant to this Section 9.05 any Lender may assign and/or pledge (without the consent of the Borrower or the Administrative Agent) all or any portion of its Loans, the other Obligations owed by or to such Lender, and its Notes, if any, to secure obligations of such Lender including to any Federal Reserve Bank or other central bank as collateral security pursuant to Regulation A of the Board and any operating circular issued by such Federal Reserve Bank or other central bank; provided, that no Lender, as between the Borrower and such Lender, shall be relieved of any of its obligations hereunder as a result of any such assignment and pledge; provided, further, that in no event shall the applicable Federal Reserve Bank or other central bank, pledgee or trustee, be considered to be a “Lender” or be entitled to require the assigning Lender to take or omit to take any action hereunder.
Section 9.06 Governing Law; Submission to Jurisdiction.
(a) Governing Law. This Agreement and each other Facility Document shall be governed by, and construed in accordance with, the Law of the State of New York.
(b) Submission to Jurisdiction. Each Loan Party irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the United States District Court for the Southern District of New York, and all appropriate appellate courts or, if jurisdiction in such court is lacking, any New York court of competent jurisdiction sitting in the County of New York (and all appropriate appellate courts), in any action or proceeding arising out of or relating to this Agreement or any other Facility Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York court or, to the fullest extent permitted by applicable Law, in such Federal court. Each of the parties hereto agrees that a final nonappealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Nothing in this Agreement or in any other Facility Document shall affect any right that a Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Facility Document against the Borrower or the properties of either such party in the courts of any jurisdiction.
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(c) Waiver of Venue. Each Loan Party irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Facility Document in any court referred to in Section 9.06(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 9.02. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable Law.
(e) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FACILITY DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FACILITY DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.06(e).
Section 9.07 Severability. In case any provision in this Agreement shall be held to be invalid, illegal or unenforceable, such provision shall be severable from the rest of this Agreement, and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 9.08 Counterparts; Integration; Effectiveness.
(a) This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Except as provided in Article III, this Agreement shall become effective when it shall have been executed by Lenders and when Lenders shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by electronic mail shall be effective as delivery of a manually executed counterpart of this Agreement.
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(b) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any assignment shall be deemed to include electronic signatures 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, or any other similar state Laws based on the Uniform Electronic Transactions Act.
Section 9.09 Survival. Sections 2.18, 2.19, Article 8, 9.04 and 9.12 shall survive the repayment of the Loans and the termination of the Commitments evidenced hereby. In addition, each representation and warranty made, or deemed to be made herein or pursuant hereto shall survive the making of such representation and warranty, and Lenders shall not be deemed to have waived, by reason of making the Loans, any Default or Event of Default that may arise by reason of such representation or warranty proving to have been false or misleading, notwithstanding that any Lender may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time such extension of credit was made.
Section 9.10 Confidentiality. Each Agent and Lender agrees to maintain the confidentiality of the Confidential Information, except that Confidential Information may be disclosed (a) to each of their respective Affiliates and to their and their respective Affiliates’ respective partners, directors, officers, employees, agents, advisors and other representatives who need to know such Confidential Information in relation to the transactions contemplated by this Agreement, (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority), (c) to the extent required by applicable Law or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Facility Document or any action or proceeding relating to this Agreement or any other Facility Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section 9.10, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to any Loan Party and its obligations, (g) with the consent of the Borrower or (h) to the extent such Confidential Information (x) becomes publicly available other than as a result of a breach of this Section 9.10 or (y) becomes available to any Lender or Agent or any of its Affiliates on a non-confidential basis from a source other than the Borrower.
Section 9.11 No Fiduciary Relationship. The Borrower acknowledges that each Agent, each Lender and their respective Affiliates (collectively, solely for purposes of this paragraph, the “Lenders”) have no fiduciary relationship with, or fiduciary duty to, the Borrower arising out of or in connection with this Agreement, and the relationship between Lenders and the Borrower is solely that of creditor and debtor. This Agreement does not create a joint venture between the parties. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Facility Document), the Borrower acknowledges and agrees that: (a) the extension of credit and other services regarding this Agreement provided by Lenders are arm’s-length commercial transactions between the Borrower, on the one hand, and Lenders, on the other hand, and that the Lenders are not acting in an advisory or agency capacity to any Loan Party, (b) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (c) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the Loans and the use of such Loan.
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Section 9.12 Right of Setoff. Upon the occurrence of an Event of Default, Lenders and their respective Affiliates (each, a “Set-off Party”) are hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to the Borrower or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency but other than escrow, payroll, payroll tax and other trust fund tax accounts) and any other Indebtedness at any time held or owing by a Set-off Party (including, but not limited to, by any of their branches and agencies wherever located) to or for the credit or the account of the Borrower or any other Loan Party against and on account of the obligations and liabilities of the Borrower or any other Loan Party to the Set-off Party under this Agreement or under any of the other Facility Documents, including, but not limited to, all claims of any nature or description arising out of or connected with this Agreement or any other Facility Document, irrespective of whether or not the relevant Set-off Party shall have made any demand hereunder and although said obligations, liabilities or claims, or any of them, shall be contingent or unmatured or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such Indebtedness. The rights of each Set-off Party under this Section 9.12 are in addition to other rights and remedies (including other rights of setoff) that Lenders or their respective Affiliates may have. Each Lender agrees to notify the Borrower and Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.
Section 9.13 Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to an Agent or a Lender, or a Lender or an Agent exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by such Agent or Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any debtor relief Law or otherwise, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred.
Section 9.14 Obligations Several. The obligations of Lenders hereunder are several and no Lender shall be responsible for the obligations or Commitment of any other Lender hereunder. Nothing contained herein or in any other Facility Document, and no action taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a partnership, an association, a joint venture or any other kind of entity.
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Section 9.15 PATRIOT Act. Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies each Loan Party that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that shall allow such Lender or the Administrative Agent, as applicable, to identify such Loan Party in accordance with the PATRIOT Act. Each Loan Party shall, promptly following any request by the Administrative Agent, the Collateral Agent or any lender, provide all documentation and other information that the Administrative Agent or such lender requests in order to comply with its ongoing obligations under the applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act and Beneficial Ownership Regulation.
Section 9.16 Headings Descriptive. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
Section 9.17 Entire Agreement. This Agreement and the other Facility Documents constitute the entire agreement between the parties hereto relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, between the parties hereto relating to the subject matter hereof.
Section 9.18 First Lien Credit Agreement. This Agreement is the “First Lien Credit Agreement” described in the Intercreditor Agreement and is hereby designated as such pursuant to Section 4.3(a) of the Intercreditor Agreement (as in effect on the Closing Date).
Section 9.19 Borrower Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents;
(b) the Credit Facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Credit Document) are an arm’s-length commercial transaction between the Borrower and the other Credit Parties, on the one hand, and the Administrative Agent, the Lenders and the other Agents on the other hand, and the Borrower and the other Credit Parties are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated hereby and by the other Credit Documents (including any amendment, waiver or other modification hereof or thereof);
(i) in connection with the process leading to such transaction, each of the Administrative Agent and the other Agents, is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary for the Borrower, any other Credit Parties or any of their respective Affiliates, equity holders, creditors or employees, or any other Person;
(ii) neither the Administrative Agent or other Agent has any obligation to the Borrower, the other Credit Parties or their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Credit Documents;
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(iii) the Administrative Agent, each other Agent and each Affiliate of the foregoing may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Administrative Agent nor any other Agent has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and
(iv) neither the Administrative Agent nor any other Agent has provided and none will provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Credit Document) and the Borrower has consulted their own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. The Borrower hereby agrees that they will not claim that any Agent owes a fiduciary or similar duty to the Credit Parties in connection with the transactions contemplated hereby and waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent or any other Agent with respect to any breach or alleged breach of agency or fiduciary duty; and
(c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower, on the one hand, and any Lender, on the other hand.
Section 9.20 Lender Acknowledgements. Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding, each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Credit Party, that at least one of the following is and will be true:
(a) such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments or this Agreement,
(b) the transaction exemption set forth in one or more PTEs, such as PTE 84¬14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96- 23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement,
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(c) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, or
(d) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.
In addition, unless either (a) sub-clause (i) in the immediately preceding clause (d)(1) is true with respect to a Lender or (b) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (d)(1), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Credit Party, that the Administrative Agent is not a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Credit Document or any documents related hereto or thereto).
Section 9.21 Acknowledgement and Consent to Bail-In of Affected Financing Institutions. Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any of the parties to any Credit Document, each party hereto any Credit Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender hereto that is an Affected Financial Institution; and
(b) the effects of any Bail-In Action on any such liability, including, if applicable: (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or (iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any applicable Resolution Authority.
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[Signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
| CURO GROUP HOLDINGS CORP., | ||
| as the Borrower | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | Chief Executive Officer | |
| CURO FINANCIAL TECHNOLOGIES CORP. | ||
| CURO INTERMEDIATE HOLDINGS CORP. | ||
| CURO MANAGEMENT LLC | ||
| SOUTHERNCO, INC. | ||
| FIRST HERITAGE CREDIT, LLC | ||
| FIRST HERITAGE CREDIT OF ALABAMA, LLC | ||
| FIRST HERITAGE CREDIT OF LOUISIANA, LLC | ||
| FIRST HERITAGE CREDIT OF MISSISSIPPI, LLC | ||
| FIRST HERITAGE CREDIT OF SOUTH CAROLINA, LLC | ||
| FIRST HERITAGE CREDIT OF TENNESSEE, LLC | ||
| each as a Guarantor | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | Chief Executive Officer | |
[SIGNATURE PAGE TO CREDIT AGREEMENT]
| CURO VENTURES, LLC | ||
| ATTAIN FINANCE, LLC | ||
| AD ASTRA RECOVERY SERVICES, INC. | ||
| CURO COLLATERAL SUB, LLC | ||
| CURO CREDIT, LLC | ||
| SOUTHERN FINANCE OF SOUTH CAROLINA, INC. | ||
| SOUTHERN FINANCE OF TENNESSEE, INC. | ||
| COVINGTON CREDIT, INC. | ||
| COVINGTON CREDIT OF GEORGIA, INC. | ||
| COVINGTON CREDIT OF ALABAMA, INC. | ||
| COVINGTON CREDIT OF TEXAS, INC. | ||
| HEIGHTS FINANCE HOLDING CO. | ||
| HEIGHTS FINANCE CORPORATION, an Illinois corporation | ||
| HEIGHTS FINANCE CORPORATION, a Tennessee corporation | ||
| QUICK CREDIT CORPORATION | ||
| each as a Guarantor | ||
| By: | /s/ Gary L. Fulk | |
| Name: | Gary L. Fulk | |
| Title: | President | |
| ENNOBLE FINANCE, LLC | ||
| as a Guarantor | ||
| By: | Curo Intermediate Holdings Corp. | |
| Its: | Sole Member | |
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
[SIGNATURE PAGE TO CREDIT AGREEMENT]
ADMINISTRATIVE AGENT AND COLLATERAL AGENT:
| ALTER DOMUS (US) LLC, | |||
| as Administrative Agent and Collateral Agent | |||
| By: | /s/ Matthew Trybula | ||
| Name: | Matthew Trybula | ||
| Title: | Associate Counsel | ||
[SIGNATURE PAGE TO CREDIT AGREEMENT]
Exhibit 10.3
Execution Version
SECURITY AGREEMENT
among
CURO GROUP HOLDINGS CORP.,
CERTAIN SUBSIDIARIES OF CURO GROUP HOLDINGS CORP.
and
ALTER DOMUS (US) LLC,
as COLLATERAL AGENT
Dated as of May 15, 2023
TABLE OF CONTENTS
Page
| ARTICLE I SECURITY INTERESTS | 2 | |
| 1.1 | Grant of Security Interests | 2 |
| 1.2 | Power of Attorney | 4 |
| ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS | 4 | |
| 2.1 | Necessary Filings | 4 |
| 2.2 | Rights in Collateral; No Liens | 5 |
| 2.3 | Other Financing Statements | 5 |
| 2.4 | Chief Executive Office; Principal Place of Business | 5 |
| 2.5 | Location of Inventory, Equipment and Other Collateral | 5 |
| 2.6 | Legal Names; Type of Organization (and Whether a Registered Organization); Jurisdiction of Organization; Location; Federal Employer Identification Number; Changes Thereto; etc. | 5 |
| 2.7 | Trade Names; Etc. | 6 |
| 2.8 | Certain Significant Transactions | 6 |
| 2.9 | Non-UCC Property | 6 |
| 2.10 | Real Property | 7 |
| 2.11 | Collateral in the Possession of a Bailee | 7 |
| 2.12 | As-Extracted Collateral; Timber-to-be-Cut | 7 |
| 2.13 | Recourse | 7 |
| ARTICLE III SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL | 7 | |
| 3.1 | Additional Representations and Warranties | 7 |
| 3.2 | Maintenance of Records | 8 |
| 3.3 | Direction to Account Debtors; Contracting Parties; etc. | 8 |
| 3.4 | Modification of Terms; etc. | 9 |
| 3.5 | Collection | 9 |
| 3.6 | Instruments | 9 |
| 3.7 | Assignors Remain Liable Under Accounts | 10 |
| 3.8 | Assignors Remain Liable Under Contracts | 10 |
| 3.9 | Deposit Accounts; Etc. | 10 |
| 3.10 | Letter-of-Credit Rights | 11 |
| 3.11 | Commercial Tort Claims | 12 |
| 3.12 | Chattel Paper | 12 |
| 3.13 | Further Actions | 12 |
| 3.14 | Insurance | 12 |
| ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS | 13 | |
| 4.1 | Additional Representations and Warranties | 13 |
| 4.2 | Licenses and Assignments | 13 |
| 4.3 | Infringements | 13 |
| 4.4 | Preservation of Marks | 14 |
(i)
| 4.5 | Maintenance of Registration | 14 |
| 4.6 | Future Registered Marks | 14 |
| 4.7 | Remedies | 14 |
| ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS | 15 | |
| 5.1 | Additional Representations and Warranties | 15 |
| 5.2 | Licenses and Assignments | 15 |
| 5.3 | Infringements | 15 |
| 5.4 | Maintenance of Patents or Copyrights | 16 |
| 5.5 | Prosecution of Patent or Copyright Applications | 16 |
| 5.6 | Other Patents and Copyrights | 16 |
| 5.7 | Remedies | 16 |
| ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL | 16 | |
| 6.1 | Protection of Collateral Agent’s Security | 16 |
| 6.2 | Warehouse Receipts Non-Negotiable | 17 |
| 6.3 | Additional Information | 17 |
| 6.4 | Further Actions | 17 |
| 6.5 | Financing Statements | 18 |
| ARTICLE VII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT | 18 | |
| 7.1 | Remedies; Obtaining the Collateral Upon Default | 18 |
| 7.2 | Remedies; Disposition of the Collateral | 20 |
| 7.3 | Waiver of Claims | 20 |
| 7.4 | Application of Proceeds | 21 |
| 7.5 | Remedies Cumulative | 21 |
| 7.6 | Discontinuance of Proceedings | 22 |
| ARTICLE VIII INDEMNITY | 22 | |
| 8.1 | Indemnity | 22 |
| 8.2 | Indemnity Obligations Secured by Collateral; Survival | 22 |
| ARTICLE IX DEFINITIONS | 22 | |
| ARTICLE X MISCELLANEOUS | 27 | |
| 10.1 | Notices | 27 |
| 10.2 | Waiver; Amendment | 28 |
| 10.3 | Obligations Absolute | 28 |
| 10.4 | Successors and Assigns | 28 |
| 10.5 | Headings Descriptive | 29 |
| 10.6 | GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL | 29 |
| 10.7 | Assignor’s Duties | 29 |
| 10.8 | Termination; Release | 29 |
| 10.9 | Counterparts | 30 |
| 10.10 | Severability | 30 |
| 10.11 | The Collateral Agent and the other Secured Parties | 30 |
(ii)
| 10.12 | Additional Assignors | 30 |
| 10.13 | Intercreditor Agreement | 31 |
| ANNEX A | Schedule of Chief Executive Offices Address(es); Principal Place of Business |
| ANNEX B | Schedule of Inventory and Equipment Locations |
| ANNEX C | Schedule of Legal Names, Type of Organization (and Whether a Registered Organization), Jurisdiction of Organization, Location and Federal Employer Identification Numbers |
| ANNEX D | Schedule of Trade and Fictitious Names |
| ANNEX E | Description of Certain Significant Transactions Occurring Within Five Year Prior to the Date of the Security Agreement |
| ANNEX F | Schedule of Deposit Accounts and Securities Accounts |
| ANNEX G | Specified Excluded Accounts |
| ANNEX H | Schedule of Commercial Tort Claims |
| ANNEX I | Schedule of Marks and Applications |
| ANNEX J | Schedule of Patents |
| ANNEX K | Schedule of Copyrights |
| ANNEX L | Trademark Security Agreement |
| ANNEX M | Grant of Security Interest in United States Patents |
| ANNEX N | Grant of Security Interest in United States Copyrights |
| ANNEX O | Form of Security Agreement Joinder |
| ANNEX P | Letter-of-Credit Rights |
| ANNEX Q | Chattel Paper and Instruments |
| ANNEX R | Real Property |
| ANNEX S | Schedule of Insurance |
[Remainder of this page intentionally left blank]
(iii)
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of May15, 2023, is made by each of the undersigned assignors (each, an “Assignor” and, together with any other entity that becomes an assignor hereunder pursuant to Section 10.12 hereof, the “Assignors”) in favor of Alter Domus (US) LLC, as collateral agent (together with any successor collateral agent or assign and any co-collateral agents, in such capacity, the “Collateral Agent”), for the benefit of the Secured Parties (as defined below). Certain capitalized terms as used herein are defined in Article IX hereof. Except as otherwise defined herein, all capitalized terms used herein and defined in the Loan Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H:
WHEREAS, CURO Group Holdings Corp., a Delaware corporation (the “Company”), the guarantors from time to time party thereto (the “Guarantors”), each Lender from time to time party thereto, and the Collateral Agent and Administrative Agent, have entered into a First Lien Credit Agreement, dated as of May 15, 2023 (as amended, modified, restated and/or supplemented from time to time, the “Loan Agreement”);
WHEREAS, pursuant to the Loan Agreement, each Guarantor has jointly and severally guaranteed to the Administrative Agent, the Collateral Agent and each Lender party thereto from time to time (collectively, and together with each other holder of Secured Obligations under and as defined in the Loan Agreement from time to time, the “Secured Parties”) the payment when due of all Secured Obligations as described (and defined) therein;
WHEREAS, in order to induce (i) the Lenders to make Loans to the Company pursuant to the terms of the Loan Agreement and (ii) the Collateral Agent to act as collateral agent, the Assignors have agreed to grant to the Collateral Agent a continuing security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, their respective Secured Obligations (as defined herein);
WHEREAS, the Intercreditor Agreement governs the relative rights and priorities of the Secured Parties, the 1.5 Lien Notes Secured Parties (as defined therein) and the Second Lien Notes Secured Parties (as defined therein) in respect of all of the Collateral; and
WHEREAS, the Assignors will obtain benefits from the making of Loans pursuant to the Loan Agreement, and, accordingly, the Assignors desire to grant a security interest in the Collateral to the Collateral Agent for its benefit and for the benefit of the Secured Parties under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Secured Parties and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Parties as follows:
Article I
SECURITY INTERESTS
1.1 Grant of Security Interests. (a) As security for the prompt and complete payment and performance when due of all of its Secured Obligations, each Assignor does hereby assign and pledge to the Collateral Agent, and does hereby grant to the Collateral Agent, for the benefit of the Secured Parties, a continuing security interest in and a continuing lien on all of the right, title and interest of such Assignor in, to and under all of the following assets, property and fixtures (and all rights therein) of such Assignor, or in which or to which such Assignor has any rights, in each case whether now existing or hereafter from time to time acquired, wherever located:
(i) each and every Account;
(ii) all cash and Cash Equivalents;
(iii) the Cash Collateral Account and all monies, securities, Instruments and other investments deposited or required to be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all Software, Domain Names, Trade Secrets, Intellectual Property Rights and all other intellectual property owned by an Assignor, including, without limitation, industrial designs and mask works; together with all causes of action arising prior to or after the date hereof for infringement or other violation of any of the forgoing;
(vii) all Contracts, together with all Contract Rights arising thereunder;
(viii) all Copyrights, together with all causes of action arising prior to or after the date hereof for infringement or other violation of any of such Copyrights;
(ix) (A) all Deposit Accounts and all other demand, deposit, time, savings, cash management, passbook and similar accounts, (B) all Securities Accounts and (C) all Commodity Accounts, in each case maintained by such Assignor with any Person and all monies, securities, Instruments, other investments or other property or assets deposited or required to be deposited in any of the foregoing;
(x) all Documents;
(xi) all Equipment;
(xii) all Fixtures;
(xiii) all General Intangibles;
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(xiv) all Goods;
(xv) all Instruments;
(xvi) all Inventory;
(xvii) all Investment Property;
(xviii) all Letters of Credit and Letter-of-Credit Rights (whether or not the respective letter of credit is evidenced by a writing);
(xix) all Marks, together with the registrations and right to all renewals thereof, the goodwill of the business of such Assignor symbolized by the Marks and all causes of action arising prior to or after the date hereof for infringement or other violation of any of the Marks;
(xx) all Patents, together with all causes of action arising prior to or after the date hereof for infringement or other violation of any of the Patents;
(xxi) all Permits;
(xxii) all Software and all Software licensing rights, including, as applicable, all writings, plans, specifications and schematics, engineering drawings, customer lists and other computer materials and records;
(xxiii) all books and records of any kind pertaining to any of the foregoing;
(xxiv) all Supporting Obligations;
(xxv) all other tangible and intangible personal property of whatever nature whether or not covered by Article 9 of the UCC; and
(xxvi) all Proceeds and products of any and all of the foregoing, all collateral security and guarantees given by any person with respect to any of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, and any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to such Assignors from time to time with respect to any of the foregoing
(all of the above, the “Collateral”).
(b) The security interest of the Collateral Agent under this Agreement extends to all Collateral which any Assignor may acquire, or with respect to which any Assignor may obtain rights, at any time during the term of this Agreement. Notwithstanding anything to the contrary contained herein, the term “Collateral” shall not include, and the security interest granted under this Agreement shall not attach to any Excluded Asset; provided that immediately upon the ineffectiveness, lapse or termination of any restriction or condition covering, or resulting in, any asset or other property of an Assignor constituting Excluded Assets, the Collateral shall (in the absence of any other applicable limitation) include, and such Assignor shall be deemed to have granted a security interest in, such Assignor’s right, title and interest in and to such asset or other property and such asset or other property shall no longer constitute Excluded Assets.
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Notwithstanding anything herein to the contrary, the lien and security interest granted pursuant to this Agreement and the exercise of any right or remedy hereunder are subject to the provisions of the Intercreditor Agreement at any time the Intercreditor Agreement is in effect. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control at any time the Intercreditor Agreement is in effect. In the event of any conflict or inconsistency between the provisions of the Loan Agreement and this Agreement relating to the duties of the Collateral Agent the provisions of the Loan Agreement shall govern and control.
1.2 Power of Attorney. Each Assignor hereby constitutes and appoints the Collateral Agent its true and lawful attorney, irrevocably, with full power exercisable solely after the occurrence of and during the continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require, demand, receive, compound, recover, compromise and give acquittance for any and all moneys and claims for moneys due or to become due to such Assignor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which is or may be reasonably necessary to protect the interests of the Secured Parties, which appointment as attorney is coupled with an interest. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Assignor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final and non-appealable judgment.
Article II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows:
2.1 Necessary Filings. Subject to Section 5.15 of the Loan Agreement, all filings, registrations, recordings and other actions necessary or appropriate to create, preserve and perfect the security interest granted by such Assignor to the Collateral Agent hereby in respect of the Collateral have been (or, within 60 days after the date hereof (as such date may be extended in accordance with Section 3.9 hereof), in the case of Deposit Accounts, Securities Accounts and Commodity Accounts, will be) accomplished and the security interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral creates a valid and, together with all such filings, registrations, recordings and other actions, a perfected security interest therein prior to the rights of all other Persons therein and subject to no other Liens (other than Permitted Liens) and is entitled to all the rights, priorities and benefits afforded by the Uniform Commercial Code or other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each case to the extent that the Collateral consists of the type of property in which a security interest may be perfected by possession or control (within the meaning of the UCC as in effect on the date hereof in the State of New York), by filing a financing statement under the Uniform Commercial Code as enacted in any relevant jurisdiction or by a filing of a Grant of Security Interest in the respective form attached hereto in the United States Patent and Trademark Office or in the United States Copyright Office.
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2.2 Rights in Collateral; No Liens. Such Assignor has the full power, authority and legal right to pledge all of the Collateral pledged by such Assignor pursuant to this Agreement and such Assignor is, and as to all Collateral acquired by it from time to time after the date hereof such Assignor will be, the owner of, or has rights in, all Collateral free from any Lien or other right, title or interest of any Person (other than Permitted Liens), and such Assignor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Collateral Agent.
2.3 Other Financing Statements. As of the date hereof, there is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) on file or of record in any relevant jurisdiction covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Permitted Liens), and so long as the Termination Date has not occurred, such Assignor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by such Assignor or in connection with Permitted Liens.
2.4 Chief Executive Office; Principal Place of Business. The chief executive office and principal place of business of such Assignor is, on the date of this Agreement, located at the address indicated on Annex A hereto for such Assignor. During the period of the four calendar months preceding the date of this Agreement, neither the chief executive office nor the principal place of business of such Assignor has been located at any address other than that indicated on Annex A in accordance with the immediately preceding sentence, in each case unless each such other address is also indicated on Annex A hereto for such Assignor.
2.5 Location of Inventory, Equipment and Other Collateral. All Inventory and Equipment held on the date hereof by each Assignor is located at one of the locations shown on Annex B hereto for such Assignor. Each other location where any Assignor maintains any books or records, owns any assets, stores any Collateral or otherwise conducts any business as of the date hereof is also set forth on Annex B.
2.6 Legal Names; Type of Organization (and Whether a Registered Organization); Jurisdiction of Organization; Location; Federal Employer Identification Number; Changes Thereto; etc.. As of the date hereof, the exact legal name of each Assignor, the type of organization of such Assignor, whether or not such Assignor is a Registered Organization, the jurisdiction of organization of such Assignor, the Location of such Assignor and the federal employer identification number of such Assignor (if any), is listed on Annex C hereto for such Assignor. Such Assignor shall not change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its jurisdiction of organization, its Location or its federal employer identification number (if any) from that listed on Annex C hereto, except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Facility Documents and so long as same do not involve (x) a Registered Organization ceasing to constitute same or (y) such Assignor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 5 Business Days’ prior written notice (or such shorter period as may be acceptable to the Collateral Agent in its sole discretion) of each change to the information listed on Annex C (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex C which shall correct all information contained therein for such Assignor, and (ii) in connection with each change or changes, it shall have taken all action reasonably necessary to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, such Assignor shall take all actions reasonably necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.
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2.7 Trade Names; Etc.. Such Assignor has or operates in any jurisdiction under, or in the preceding five years has had or has operated in any jurisdiction under, no legal names, trade names, fictitious names or other names except its legal name as specified in Annex C and such other trade or fictitious names as are listed on Annex D hereto for such Assignor. Such Assignor shall not assume or operate in any jurisdiction under any new trade, fictitious or other name that would make any financing statement, or continuation statement filed in connection therewith, seriously misleading within the meaning of Sections 9-506 or 9-507 (or analogous provision) of the UCC until (i) it shall have given to the Collateral Agent not less than 5 Business Days’ written notice (or such shorter period as may be acceptable to the Collateral Agent in its sole discretion) of its intention to do so, clearly describing such new name and the jurisdictions in which such new name will be used and providing such other information in connection therewith as the Collateral Agent may reasonably request and (ii) with respect to such new name, it shall have taken all actions reasonably necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect.
2.8 Certain Significant Transactions. During the five year period preceding the date of this Agreement, no Person has merged, amalgamated or consolidated with or into any Assignor, and no Person has liquidated into, or transferred all or substantially all of its assets to, any Assignor, in each case except as described in Annex E hereto.
2.9 Non-UCC Property. The aggregate Fair Market Value of all property of the Assignors of the types described in clauses (1), (2) and (3) of Section 9-311(a) of the UCC and constituting Collateral (other than any Excluded Asset) does not exceed $1,000,000. If the aggregate Fair Market Value of all such property at any time owned by all Assignors and constituting Collateral (other than any Excluded Asset) exceeds $1,000,000, the Assignors shall provide prompt written notice thereof to the Collateral Agent and the Assignors shall promptly (and in any event within 30 days after acquiring knowledge thereof, unless the Collateral Agent shall extend such period in its sole discretion) take such actions (at their own cost and expense) as may be required under the respective United States, State or other laws referenced in Section 9-311(a) of the UCC to perfect the security interests granted herein in any Collateral (other than any Excluded Asset) where the filing of a financing statement does not perfect the security interest in such property in accordance with the provisions of Section 9-311(a) of the UCC.
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2.10 Real Property. As of the date hereof, Annex R contains a true, accurate and complete list of each real property owned by each of the Assignors in fee simple that has a Fair Market Value in excess of $2,500,000.
2.11 Collateral in the Possession of a Bailee. If any Inventory or other Goods are at any time in the possession of a bailee (other than with respect to Inventory, Equipment or Goods, in each case in transit or out for repair or servicing in the ordinary course of business), such Assignor shall promptly notify the Collateral Agent thereof and, if requested by the Collateral Agent, shall use its commercially reasonable efforts to promptly obtain an acknowledgment from such bailee, in form and substance reasonably satisfactory to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions of the Collateral Agent, without the further consent of such Assignor. The Collateral Agent agrees with such Assignor that the Collateral Agent shall not give any such instructions unless an Event of Default has occurred and is continuing or would occur after taking into account any action by the respective Assignor with respect to any such bailee.
2.12 As-Extracted Collateral; Timber-to-be-Cut. On the date hereof, such Assignor does not own, or expect to acquire, any property which constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut. If at any time after the date of this Agreement such Assignor owns, acquires or obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such Assignor shall furnish the Collateral Agent with prompt written notice thereof (which notice shall describe in reasonable detail the As-Extracted Collateral and/or Timber-to-be-Cut and the locations thereof) and shall take all actions reasonably necessary to perfect the security interest of the Collateral Agent therein.
2.13 Recourse. This Agreement is made with full recourse to each Assignor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Assignor contained herein, in the Facility Documents and otherwise in writing in connection herewith or therewith.
Article III
SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
3.1 Additional Representations and Warranties. As of the time when each of its Accounts arises, each Assignor shall be deemed to have represented and warranted that each such Account, and all of Assignor’s records, papers and documents relating thereto (if any) are genuine and what they purport to be, and that all papers and documents (if any) relating thereto (i) will, to the knowledge of such Assignor, represent the genuine, legal, valid and binding obligation of the account debtor evidencing indebtedness unpaid and owed by the respective account debtor arising out of the performance of labor or services or the sale, lease, assignment or other disposition and delivery of the property listed therein, or both, (ii) will be the only original writings evidencing and embodying such obligation of the account debtor named therein (other than copies created for general accounting purposes), (iii) will, to the knowledge of such Assignor, evidence true and valid obligations, enforceable in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally or by equitable principles of general applicability and (iv) will be in compliance and will conform in all material respects with all applicable federal, state and local laws and applicable laws of any relevant foreign jurisdiction.
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3.2 Maintenance of Records. Each Assignor will keep and maintain, at its own cost and expense, complete, accurate and proper books and records, in all material respects, of the Collateral, including, but not limited to, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith, and such Assignor will make the same available on such Assignor’s premises to the Collateral Agent for inspection, at such Assignor’s own cost and expense, at any and all reasonable times, but not more than two (2) such inspections per calendar year (except upon the occurrence and during the continuance of an Event of Default), upon prior notice to such Assignor. Upon the occurrence and during the continuance of an Event of Default and at the request of the Collateral Agent, such Assignor shall, at its own cost and expense, deliver all tangible evidence of its Accounts and Contract Rights (including, without limitation, all documents evidencing the Accounts and all Contracts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Assignor), as well as such reports relating thereto as the Collateral Agent may reasonably request. Upon the occurrence and during the continuance of an Event of Default and if the Collateral Agent so directs, such Assignor shall legend, in form and manner reasonably satisfactory to the Collateral Agent, the Accounts and the Contracts, as well as books, records and documents (if any) of such Assignor evidencing or pertaining to such Accounts and Contracts with an appropriate reference to the fact that such Accounts and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein.
3.3 Direction to Account Debtors; Contracting Parties; etc.. Upon the occurrence and during the continuance of an Event of Default, if the Collateral Agent so directs any Assignor, such Assignor agrees (x) to instruct all obligors with respect to the Accounts and Contracts to make all payments on account of the Accounts and Contracts to be made directly to the Cash Collateral Account, (y) that the Collateral Agent may, but has no obligation to, directly notify the obligors with respect to any Accounts and/or under any Contracts to make payments with respect thereto as provided in the preceding clause (x), and (z) that the Collateral Agent may enforce collection of any such Accounts and Contracts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as such Assignor. Without notice to or assent by any Assignor, the Collateral Agent may, upon the occurrence and during the continuance of an Event of Default, apply any or all amounts then in, or thereafter deposited in, the Cash Collateral Account toward the payment of the Secured Obligations in the manner provided in Section 7.4 of this Agreement. Any costs and expenses of collection (including attorneys’ fees) incurred by an Assignor shall be borne solely by such Assignor. Any reasonable and documented costs and expenses of collection (including reasonable and documented out-of-pocket attorneys’ fees) incurred by the Collateral Agent shall be borne solely by the relevant Assignor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the relevant Assignor, provided that (x) the failure by the Collateral Agent to so notify such Assignor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 3.3 and (y) no such notice shall be required if an Event of Default of the type described in Section 6.01(f) of the Loan Agreement has occurred and is continuing.
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3.4 Modification of Terms; etc.. Except in accordance with such Assignor’s ordinary course of business or as is consistent with reasonable business judgment or as permitted by Section 3.5 hereof, no Assignor shall rescind or cancel any indebtedness evidenced by any Account or under any Contract, or modify any material term thereof or make any material adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Account or Contract, or interest therein. No Assignor will do anything to impair the rights of the Collateral Agent in the Accounts or Contracts.
3.5 Collection. Each Assignor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Accounts or obligor under any Contract, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Account or Contract, and apply promptly upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account or under such Contract. Except as otherwise directed by the Collateral Agent after the occurrence and during the continuation of an Event of Default, any Assignor may allow in the ordinary course of business as adjustments to amounts owing under its Accounts and Contracts (i) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Assignor finds appropriate in accordance with reasonable business judgment and (ii) a refund or credit due as a result of returned or damaged merchandise or improperly performed services or for other reasons which such Assignor finds appropriate in accordance with reasonable business judgment. Any costs and expenses of collection (including attorneys’ fees) incurred by an Assignor shall be borne solely by such Assignor. Any reasonable and documented costs and expenses (including, without limitation, reasonable and documented out-of-pocket attorneys’ fees) of collection incurred by the Collateral Agent shall be borne solely by the relevant Assignor.
3.6 Instruments. No Assignor owns, as of the date hereof, any Instrument (other than (x) checks and other payment instruments received and collected in the ordinary course of business and (y) any Instrument subject to pledge pursuant to the Pledge Agreement) with a stated amount or Fair Market Value in excess of $250,000 except as set forth on Annex Q. If any Assignor owns or acquires any Instrument in excess of $250,000 constituting Collateral (other than (x) checks and other payment instruments received and collected in the ordinary course of business and (y) any Instrument subject to pledge pursuant to the Pledge Agreement), such Assignor will within 30 days thereafter (or such longer period as may be acceptable to the Collateral Agent in its sole discretion) notify the Collateral Agent thereof in writing, and upon request by the Collateral Agent will promptly deliver such Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent.
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3.7 Assignors Remain Liable Under Accounts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Accounts to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to such Accounts. Neither the Collateral Agent nor any other Secured Party shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Party of any payment relating to such Account pursuant hereto, nor shall the Collateral Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.
3.8 Assignors Remain Liable Under Contracts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Contracts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with and pursuant to the terms and provisions of each Contract. Neither the Collateral Agent nor any other Secured Party shall have any obligation or liability under any Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Party of any payment relating to such Contract pursuant hereto, nor shall the Collateral Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any performance by any party under any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.
3.9 Deposit Accounts; Etc.. (a) No Assignor maintains, or at any time after the date of this Agreement shall establish or maintain, any Deposit Account, Securities Account or Commodity Account, except for such accounts maintained with a bank (as defined in Section 9-102 of the UCC) whose jurisdiction (determined in accordance with Section 9-304 of the UCC) is within a State of the United States. Annex F hereto accurately sets forth, as of the date of this Agreement, for each Assignor, each Deposit Account, Securities Account and Commodity Account maintained by such Assignor (including a description thereof and the respective account number), the name of the respective bank with which such Deposit Account, Securities Account or Commodity Account is maintained, and the jurisdiction of the respective bank with respect to such Deposit Account, Securities Account or Commodity Account. For each Deposit Account, Securities Account or Commodity Account (other than any Excluded Account), the respective Assignor shall cause the bank with which such Deposit Account, Securities Account or Commodity Account is maintained to execute and deliver to the Collateral Agent, within 60 days after the date of this Agreement (as such date may be extended by the Collateral Agent in its sole discretion) or, if later, at the time of the establishment of the respective Deposit Account, Securities Account or Commodity Account, a “control agreement” in form and substance reasonably satisfactory to the Collateral Agent. If any bank with which a Deposit Account, Securities Account or Commodity Account (other than an Excluded Account) is maintained refuses to, or does not, enter into such a “control agreement”, then the respective Assignor shall promptly (and in any event within 60 days after the date of this Agreement (as such date may be extended by the Collateral Agent in its sole discretion) or, if later, the time of establishment of such account), close the respective Deposit Account, Securities Account or Commodity Account and transfer all balances therein to the Cash Collateral Account or Deposit Account, Securities Account or Commodity Account meeting the requirements of this Section 3.9. If any bank with which a Deposit Account, Securities Account or Commodity Account (other than an Excluded Account) is maintained refuses to subordinate its claims with respect to such Deposit Account, Securities Account or Commodity Account to the Collateral Agent’s security interest therein on terms reasonably satisfactory to the Collateral Agent, then the Collateral Agent, at its option in its sole discretion, may (x) require that the respective Assignor terminate such Deposit Account, Securities Account or Commodity Account and transfer all balances therein to the Cash Collateral Account or another Deposit Account, Securities Account or Commodity Account in accordance with the immediately preceding sentence or (y) agree to a “control agreement” without such subordination.
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(b) After the date of this Agreement, no Assignor shall establish any new Deposit Account, Securities Account or Commodity Account, except for (x) Deposit Accounts, Securities Accounts or Commodity Accounts that are established and maintained with banks and meeting the requirements of Section 3.9(a) and (y) Excluded Accounts. At the time any such Deposit Account, Securities Account or Commodity Account (other than an Excluded Account) is established, the appropriate “control agreement” shall be entered into in accordance with the requirements of preceding clause (a) and the respective Assignor shall, upon request by the Collateral Agent, furnish to the Collateral Agent a supplement to Annex F hereto containing the relevant information with respect to the respective Deposit Account, Securities Account or Commodity Account and the bank with which same is established.
(c) Notwithstanding anything to the contrary herein, no Assignor shall be required to take any action to cause the Collateral Agent to obtain control (“Control”) in accordance with Section 9-104 or 9-106(c), as the case may be, of the UCC with respect to any Excluded Account; provided, that if such Assignor shall cause the Collateral Agent to have Control over any such Deposit Account, Securities Account or Commodity Account, such Assignor will ensure that the security interest granted by it in favor of the Collateral Agent hereunder to secure the Secured Obligations is also perfected by Control as contemplated by Section 4.7 of the Intercreditor Agreement.
3.10 Letter-of-Credit Rights. As of the date hereof, no Assignor is a beneficiary under a Letter of Credit with a stated amount of $250,000 or more or Letters of Credit in an aggregate stated amount of $1,000,000 or more, except as set forth on Annex P. If any Assignor is at any time a beneficiary under a Letter of Credit with a stated amount of $250,000 or more or an aggregate stated amount of $1,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof and such Assignor shall, pursuant to an agreement, use its commercially reasonable efforts to either (i) arrange for the issuer and any confirmer of such Letter of Credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under such Letter of Credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of such Letter of Credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the Letter of Credit are to be applied as provided in this Agreement after the occurrence and during the continuance of an Event of Default.
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3.11 Commercial Tort Claims. All Commercial Tort Claims of each Assignor asserted in a judicial proceeding in existence on the date of this Agreement are described in Annex H hereto. If any Assignor shall at any time after the date of this Agreement acquire a Commercial Tort Claim asserted in a judicial proceeding in an amount (taking the greater of the aggregate claimed damages thereunder or the reasonably estimated value thereof) of $250,000 or more, such Assignor shall promptly notify the Collateral Agent thereof in a writing signed by such Assignor and describing the details thereof and shall grant to the Collateral Agent in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement.
3.12 Chattel Paper. As of the date hereof, Annex Q is a true and correct list of all Chattel Paper (including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper) held by each Assignor, having a value or face amount of $250,000 or more or an aggregate value or face amount in excess of $1,000,000. Upon the reasonable request of the Collateral Agent made at any time or from time to time, each Assignor shall promptly furnish to the Collateral Agent a list of all Electronic Chattel Paper held or owned by such Assignor. Furthermore, each Assignor shall promptly take all actions which are reasonably practicable so that the Collateral Agent has “control” of all Electronic Chattel Paper with a value or face amount of $500,000 or more or an aggregate value or face amount in excess of $1,000,000 in accordance with the requirements of Section 9-105 of the UCC. Each Assignor will promptly (and in any event within 30 days (or such longer period as may be acceptable to the Collateral Agent in its sole discretion)) following any reasonable request by the Collateral Agent, deliver all of its Tangible Chattel Paper to the Collateral Agent.
3.13 Further Actions. Each Assignor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps, including any and all actions as may be reasonably necessary or required under the Federal Assignment of Claims Act, relating to its Accounts, Contracts, Instruments and other property or rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require, to the extent otherwise required herein, and not otherwise inconsistent with the provisions of Section 1.1(b).
3.14 Insurance. As of the date hereof, Annex S is a true and correct description of all insurance policies of the Assignors (which Annex S sets forth, with respect to each policy, the Assignors covered, the amount of coverage, the date of expiry, the type of coverage and the insurance provider). Subject to the terms of the Intercreditor Agreement, each Assignor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Assignor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of such Assignor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that any Assignor at any time or times shall fail to obtain or maintain any of the policies of insurance required by the Loan Agreement or any Facility Document or to pay any premium in whole or part relating thereto, the Collateral Agent may, without waiving or releasing any obligation or liability of the Assignors hereunder or any Event of Default, in its sole discretion, subject to the terms of the Intercreditor Agreement, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Collateral Agent reasonably deems advisable. All sums disbursed by the Collateral Agent in connection with this Section 3.14, including reasonable and documented attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Assignors to the Collateral Agent and shall be additional Secured Obligations secured hereby.
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Article IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1 Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use the registered Marks listed in Annex I hereto for such Assignor and that said listed Marks include all United States trademarks, service marks, trade dress or trade names, registrations and applications for United States marks registered in the United States Patent and Trademark Office as of the date hereof. Each Assignor represents and warrants that it owns, is licensed to use or otherwise has the right to use, all material trademarks, service marks, trade dress or trade names and all Internet domain names and associated URL addresses that it uses. Each Assignor further warrants that it has no knowledge of any third party claim received by it that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any trademark, service mark or trade name of any other Person other than as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use all U.S. trademark registrations and applications listed in Annex I hereto and that said registrations are valid, subsisting, have not been canceled and that such Assignor is not aware of any third-party claim that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said applications will not mature into registrations, other than as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of an Event of Default, any document which may be required by the United States Patent and Trademark Office or applicable Domain Name registrar in order to effect an absolute assignment of all right, title and interest in each Mark and/or Domain Name, and record the same.
4.2 Licenses and Assignments. Except as otherwise permitted by the Facility Documents, each Assignor hereby agrees not to divest itself of any right under any Mark.
4.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to notify the Collateral Agent in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any party who such Assignor believes is, or may be, infringing or diluting or otherwise violating any of such Assignor’s rights in and to any Mark in any manner that could reasonably be expected to have a Material Adverse Effect, or with respect to any party claiming that such Assignor’s use of any Mark material to such Assignor’s business violates in any material respect any property right of that party. Each Assignor further agrees to prosecute diligently in accordance with reasonable business practices any Person infringing any Mark or any trademarks, service marks, trade dress and trade names exclusively licensed by such Assignor in any manner that could reasonably be expected to have a Material Adverse Effect.
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4.4 Preservation of Marks. Each Assignor agrees to use the Marks owned or any trademarks, service marks, trade dress and trade names exclusively licensed by such Assignor which are material to such Assignor’s business in interstate commerce during the time in which this Agreement is in effect and to take all such other actions as are reasonably necessary to preserve such Marks as trademarks or service marks under the laws of the United States (other than any such Marks which are no longer used or useful in its business or operations).
4.5 Maintenance of Registration. Each Assignor shall, at its own expense, diligently process all documents reasonably required to maintain all Mark registrations and/or Domain Names owned by such Assignor, including but not limited to affidavits of use and applications for renewals of registration in the United States Patent and Trademark Office for all of its material registered Marks, and shall pay all fees and disbursements in connection therewith and shall not abandon any such filing of affidavit of use or any such application of renewal prior to the exhaustion of all administrative and judicial remedies (other than with respect to registrations and applications deemed by such Assignor in its reasonable business judgment to be no longer prudent to pursue).
4.6 Future Registered Marks. If any Mark registration is issued hereafter to any Assignor as a result of any application now or hereafter pending before the United States Patent and Trademark Office, any Assignor hereafter applies for any Mark with the United States Patent and Trademark Office or any Assignor acquires any United States Mark registration or application, within 30 days after such occurrence (or such longer period as may be acceptable to the Collateral Agent in its sole discretion), such Assignor shall deliver to the Collateral Agent a copy of such registration certificate or similar indicia of ownership, and a grant of a security interest in such Mark registration or Mark application, to the Collateral Agent and at the expense of such Assignor, confirming the grant of a security interest in such Mark registration or Mark application to the Collateral Agent hereunder, the form of such security to be substantially in the form of Annex L hereto or in such other form as may be reasonably satisfactory to the Collateral Agent.
4.7 Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title and interest of such Assignor in and to each of the Marks and Domain Names, together with all trademark rights and rights of protection to the same, vested in the Collateral Agent for the benefit of the Secured Parties, in which event such rights, title and interest shall immediately vest, in the Collateral Agent for the benefit of the Secured Parties, and the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged and notarized and record said absolute assignment with the applicable agency or registrar; (ii) take and use or sell the Marks or Domain Names and the goodwill of such Assignor’s business symbolized by the Marks or Domain Names and the right to carry on the business and use the assets of such Assignor in connection with which the Marks or Domain Names have been used; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from using the Marks or Domain Names in any manner whatsoever, directly or indirectly, and such Assignor shall execute such further documents that the Collateral Agent may reasonably request to further confirm this and to transfer ownership of the Marks or Domain Names and registrations and any pending trademark applications in the United States Patent and Trademark Office or applicable Domain Name registrar to the Collateral Agent.
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Article V
SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1 Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of all rights in (i) all Trade Secrets, (ii) the Patents listed in Annex J hereto for such Assignor and that said Patents include all the United States patents and applications for United States patents that such Assignor owns as of the date hereof and (iii) the Copyrights listed in Annex K hereto for such Assignor and that said Copyrights include all the United States copyrights registered with the United States Copyright Office and applications to United States copyrights that such Assignor owns as of the date hereof. Each Assignor further warrants that it has no knowledge of any third party claim that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any patent of any other Person or such Assignor has misappropriated any Trade Secret or proprietary information which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Event of Default, any document which may be required by the United States Patent and Trademark Office or the United States Copyright Office in order to effect an absolute assignment of all right, title and interest in each Patent or Copyright, and to record the same.
5.2 Licenses and Assignments. Except as otherwise permitted by the Facility Documents, each Assignor hereby agrees not to divest itself of any right under any Patent or Copyright.
5.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to furnish the Collateral Agent in writing with all pertinent information available to such Assignor with respect to any infringement, contributing infringement or active inducement to infringe or other violation of such Assignor’s rights in any Patent or Copyright or to any claim that the practice of any Patent or use of any Copyright violates any property right of a third party, or with respect to any misappropriation of any Trade Secret or any claim that practice of any Trade Secret Right violates any property right of a third party, in each case, in any manner which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor further agrees, to diligently prosecute, in accordance with its reasonable business judgment, any Person infringing any Patent or Copyright owned or any patent or copyright exclusively licensed by such Assignor or any Person misappropriating any Trade Secret, in each case to the extent that such infringement or misappropriation, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
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5.4 Maintenance of Patents or Copyrights. At its own expense, each Assignor shall make timely payment of all post-issuance fees required to maintain in force its rights under each Patent or Copyright owned by such Assignor (other than any such Patents or Copyrights which are no longer used or are deemed by such Assignor in its reasonable business judgment to no longer be useful in its business or operations).
5.5 Prosecution of Patent or Copyright Applications. At its own expense, each Assignor shall diligently prosecute all material applications owned by such Assignor for (i) United States Patents listed in Annex J hereto and (ii) Copyrights listed on Annex K hereto, in each case for such Assignor and shall not abandon any such application prior to exhaustion of all administrative and judicial remedies (other than applications that are deemed by such Assignor in its reasonable business judgment to no longer be necessary in the conduct of the Assignor’s business).
5.6 Other Patents and Copyrights. Within 30 days after the acquisition or issuance of a United States Patent, registration of a Copyright, or acquisition of a registered Copyright, or of filing of an application for a United States Patent or Copyright, the relevant Assignor shall deliver to the Collateral Agent a copy of said Copyright or Patent, or certificate or registration of, or application therefor, as the case may be, with a grant of a security interest as to such Patent or Copyright, as the case may be, to the Collateral Agent and at the sole expense of such Assignor, confirming the grant of a security interest, the form of such grant of a security interest to be substantially in the form of Annex M or N hereto, as appropriate.
5.7 Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title, and interest of such Assignor in each of the Patents and Copyrights vested in the Collateral Agent for the benefit of the Secured Parties, in which event such right, title, and interest shall immediately vest in the Collateral Agent for the benefit of the Secured Parties, in which case the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 5.1 hereof to execute, cause to be acknowledged and notarized and to record said absolute assignment with the applicable agency; (ii) take and practice or sell the Patents and Copyrights; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and such Assignor shall execute such further documents as the Collateral Agent may reasonably request further to confirm this and, to the extent permitted by applicable law, to transfer ownership of the Patents and Copyrights to the Collateral Agent for the benefit of the Secured Parties.
Article VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1 Protection of Collateral Agent’s Security. Except as otherwise permitted by the Facility Documents, each Assignor will do nothing to impair the rights of the Collateral Agent in the Collateral. Each Assignor will at all times maintain insurance, at such Assignor’s own expense to the extent and in the manner provided in the Facility Documents. Except to the extent otherwise permitted to be retained by such Assignor or applied by such Assignor pursuant to the terms of the Facility Documents, the Collateral Agent shall, at the time any proceeds of such insurance are distributed to the Secured Parties, apply such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Assignor to pay the Secured Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Assignor.
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6.2 Warehouse Receipts Non-Negotiable. To the extent practicable, each Assignor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its Inventory, such Assignor shall request that such warehouse receipt or receipt in the nature thereof shall not be “negotiable” (as such term is used in Section 7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction or under other relevant law).
6.3 Additional Information. Each Assignor will, at its own expense, from time to time upon the reasonable request of the Collateral Agent, promptly (and in any event within 10 Business Days after its receipt of the respective request (or such longer period as may be acceptable to the Collateral Agent in its sole discretion)) furnish to the Collateral Agent such information with respect to the Collateral (including the identity of the Collateral or such components thereof as may have been reasonably requested by the Collateral Agent, the value and location of such Collateral, etc.) as may be reasonably requested by the Collateral Agent. Without limiting the forgoing, each Assignor agrees that it shall promptly (and in any event within 10 Business Days after its receipt of the respective request (or such longer period as may be acceptable to the Collateral Agent in its sole discretion)) furnish to the Collateral Agent such updated Annexes hereto as may from time to time be reasonably requested by the Collateral Agent; provided, however, that the Collateral Agent shall have no duty to so request unless directed to do so by the Required Lenders in accordance with the Loan Agreement. Each Assignor agrees that it shall, concurrently with the delivery of annual financial statements pursuant to Section 5.01(b) of the Loan Agreement, furnish to the Collateral Agent, to the extent there are any changes to such Annexes, updated Annexes A through F, inclusive, H through K, inclusive, and P through S, inclusive, hereto and be deemed to have made each representation or warranty set forth herein referencing such Annexes as of the date of delivery thereof (rather than the date of this Agreement).
6.4 Further Actions. Each Assignor will, at its own expense and upon the reasonable request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which are or may be necessary to perfect, preserve or protect its security interest in the Collateral to the extent otherwise required herein and not otherwise inconsistent with the provisions of Section 1.1(b); provided, however, that the Collateral Agent shall have no duty to so request unless directed to do so by the Required Lenders in accordance with the Loan Agreement.
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6.5 Financing Statements. Each Assignor agrees to execute (where applicable) and deliver to the Collateral Agent such financing statements, continuation statements or amendments thereof (under the UCC or otherwise) as the Collateral Agent may from time to time reasonably request or as are reasonably necessary to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby. Each Assignor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Assignor hereby authorizes the Collateral Agent to file any such financing statements, continuation statements or amendments (under the UCC or otherwise) without the signature of such Assignor where permitted by law (and such authorization includes describing the Collateral as “all assets” of such Assignor); provided, however, that the Collateral Agent shall have no liability or responsibility to make any such filings unless directed to do so by the Required Lenders in accordance with the Loan Agreement.
Article VII
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
7.1 Remedies; Obtaining the Collateral Upon Default. Each Assignor agrees that, if any Event of Default shall have occurred and be continuing then and in every such case, the Collateral Agent, in addition to any rights now or hereafter existing under applicable law and under the other provisions of this Agreement, shall have all rights as a secured creditor under any UCC, and such additional rights and remedies to which a secured creditor is entitled under the laws in effect in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from such Assignor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon such Assignor’s premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument or other obligation (including, without limitation, the Accounts and the Contracts) constituting the Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the Collateral Agent and may exercise any and all remedies of such Assignor in respect of such Collateral;
(iii) instruct all banks which have entered into a control agreement with the Collateral Agent to transfer all monies, securities, Instruments, other investments and other property or assets held by such depositary bank to the Cash Collateral Account;
(iv) sell, assign or otherwise liquidate any or all of the Collateral or any part thereof in accordance with Section 7.2 hereof, or direct such Assignor to sell, assign or otherwise liquidate any or all of the Collateral or any part thereof, and, in each case, take possession of the proceeds of any such sale or liquidation;
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(v) take possession of the Collateral or any part thereof, by directing such Assignor in writing to deliver the same to the Collateral Agent at any reasonable place or places designated by the Collateral Agent, in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or places so designated by the Collateral Agent and there delivered to the Collateral Agent;
(y) store and keep any Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent as provided in Section 7.2 hereof; and
(z) while the Collateral shall be so stored and kept, provide such security and maintenance services as shall be reasonably necessary to protect the same and to preserve and maintain it in good condition;
(vi) license or sublicense, whether on an exclusive or nonexclusive basis, any Marks, Domain Names, Patents or Copyrights or Intellectual Property Rights included in the Collateral for such term and on such conditions and in such manner as the Collateral Agent shall determine;
(vii) apply any monies constituting Collateral or proceeds thereof in accordance with the provisions of Section 7.4; and
(viii) take any other action as specified in clauses (1) through (5), inclusive, of Section 9-607 of the UCC;
it being understood that each Assignor’s obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor of said obligation. By accepting the benefits of this Agreement and each other Collateral Document, the Secured Parties expressly acknowledge and agree that this Agreement and each other Collateral Document may be enforced only by the action of the Collateral Agent and that no other Secured Party shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Parties upon the terms of this Agreement, the Loan Agreement and the other Facility Documents.
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7.2 Remedies; Disposition of the Collateral. If any Event of Default shall have occurred and be continuing then any Collateral repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and any other Collateral whether or not so repossessed by the Collateral Agent, may be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as are commercially reasonable and the Assignors hereby acknowledge and agree that any sale or disposition hereunder or in connection herewith shall constitute a commercially reasonable sale or disposition. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair at the expense of the relevant Assignor and the Collateral Agent shall have no liability or responsibility for the value received for any Collateral sold or disposed of, regardless of the fair market value of such Collateral prior to such sale or disposition. Any such sale, lease or other disposition may be effected by means of a public disposition or private disposition, effected in accordance with the applicable requirements (in each case if and to the extent applicable) of Sections 9-610 through 9-613 of the UCC and/or such other mandatory requirements of applicable law as may apply to the respective disposition. The Collateral Agent may, without notice or publication, adjourn any public or private disposition or cause the same to be adjourned from time to time by announcement at the time and place fixed for the disposition, and such disposition may be made at any time or place to which the disposition may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may bid for and become the purchaser (and may pay all or any portion of the purchase price by crediting Secured Obligations against the purchase price) of the Collateral or any item thereof, offered for disposition in accordance with this Section 7.2 without accountability to the relevant Assignor. If, under applicable law, the Collateral Agent shall be permitted to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor only such notice of disposition as shall be required by such applicable law. Each Assignor agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make such disposition or dispositions of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Assignor’s expense.
7.3 Waiver of Claims. Except as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession or any such disposition except any damages which are the direct result of the Collateral Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision);
(ii) all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agent’s rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and each Assignor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws.
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Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant Assignor therein and thereto, and shall be a perpetual bar both at law and in equity against such Assignor and against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such Assignor.
7.4 Application of Proceeds. (a) Subject to the terms of the Intercreditor Agreement, all monies and other property and assets collected or received by the Collateral Agent or any other Secured Party upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies and other property and assets collected or received by the Collateral Agent hereunder or upon any distribution of (or on account of) Collateral (whether or not characterized as such) in connection with any case, proceeding or other action of the type described in Sections 6.01(f) of the Loan Agreement, shall be applied (1) first, to any amounts owed to the Agents under the Facility Documents and (2) second, to the holders of the Secured Obligations that are then due, on a pro rata basis.
(b) It is understood that the Assignors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Secured Obligations.
(c) If any Secured Party collects or receives any distribution to which it is not entitled under Section 7.4(a) hereof, such Secured Party shall hold the same in trust for the Secured Parties and shall forthwith deliver the same to the Collateral Agent, for the account of the Secured Parties, to be applied in accordance with Section 7.4(a) hereof.
7.5 Remedies Cumulative. Each and every right, power and remedy hereby specifically given to the Collateral Agent shall be in addition to every other right, power and remedy specifically given to the Collateral Agent under this Agreement, the other Facility Documents or now or hereafter existing at law, in equity or by statute and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning of the exercise of one shall not be deemed a waiver of the right to exercise any other or others. No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of any of the Secured Obligations shall impair any such right, power or remedy or shall be construed to be a waiver of any Default or Event of Default or an acquiescence thereof. No notice to or demand on any Assignor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent to any other or further action in any circumstances without notice or demand. In the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may recover reasonable expenses, including reasonable attorneys’ fees, and the amounts thereof shall be included in such judgment.
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7.6 Discontinuance of Proceedings. In case the Collateral Agent shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case the relevant Assignor, the Collateral Agent and each holder of any of the Secured Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such proceeding had been instituted.
Article VIII
INDEMNITY
8.1 Indemnity. Section 9.04 of the Loan Agreement (Indemnification by the Borrower) is hereby incorporated by reference as if fully set forth herein mutatis mutandis.
8.2 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Secured Obligations secured by the Collateral. The indemnity obligations of each Assignor contained in this Article VIII shall continue in full force and effect notwithstanding the full payment of all of the Secured Obligations and notwithstanding the discharge thereof and the occurrence of the Termination Date and any such indemnity claim shall constitute a Secured Obligation.
Article IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such definitions shall be equally applicable to the singular and plural forms of the terms defined.
“Account” shall mean any “account” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, and in any event shall include but shall not be limited to, all rights to payment of any monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State.
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“Agreement” shall mean this Security Agreement, as the same may be amended, modified, restated and/or supplemented from time to time in accordance with its terms.
“As-Extracted Collateral” shall mean “as-extracted collateral” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Assignor” shall have the meaning provided in the first paragraph of this Agreement.
“Cash Collateral Account” shall mean a non-interest bearing cash collateral account established following the occurrence of an Event of Default and maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Parties.
“Chattel Paper” shall mean “chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. Without limiting the foregoing, the term “Chattel Paper” shall in any event include all Tangible Chattel Paper and all Electronic Chattel Paper.
“Commercial Tort Claim” shall mean any “commercial tort claim” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Commodity Account” shall mean any “commodity account” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Contract Rights” shall mean all rights of any Assignor under each Contract, including, without limitation, (i) any and all rights to receive and demand payments under any or all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts.
“Contracts” shall mean all contracts between any Assignor and one or more additional parties (including, without limitation, any Interest Rate Protection Agreements, Other Hedging Agreements, licensing agreements and any partnership agreements, joint venture agreements and limited liability company agreements and any agreement pursuant to which Assignor licenses or is otherwise granted any right, title or interest in any Intellectual Property Rights, or Software or other intangible property).
“Copyrights” shall mean any United States or foreign copyrights now or hereafter owned by any Assignor, including any registrations of any copyrights in the United States Copyright Office or any foreign equivalent office, as well as any application for a copyright registration now or hereafter made with the United States Copyright Office or any foreign equivalent office by any Assignor.
“Default” shall mean a “Default” or similar term as such defined in the Loan Agreement, so long as such agreement is in effect.
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“Deposit Account” shall mean any “deposit account” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Distribution” shall have the meaning provided in Section 7.4(a) of this Agreement.
“Document” shall mean any “document” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Domain Names” shall mean all Internet domain names and associated URL addresses now or hereafter owned by any Assignor.
“Electronic Chattel Paper” shall mean “electronic chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Equipment” shall mean any “equipment” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, and in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned by any Assignor and any and all additions, substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.
“Event of Default” shall mean an “Event of Default” or similar term as such term is defined in the Loan Agreement, so long as any such agreement is in effect.
“Excluded Accounts” shall mean (i) any Deposit Account, Securities Account or Commodity Account, that when taken together with all of the other Deposit Accounts, Securities Accounts and Commodity Accounts not subject to “control agreements” in favor of the Collateral Agent, has not had a closing balance on any day since the date of this Agreement that exceeds $500,000, (ii) any zero balance account, (iii) any bona fide trust account, escrow account or fiduciary account (in each case, for the benefit of a third party) or security deposits established pursuant to statutory obligations and escrow accounts established pursuant to contractual obligations to third parties for casualty payments and insurance proceeds, in each case in the ordinary course of business,, (iv) any Excluded Deposit Account and (vi) the accounts listed on Annex G.
“Excluded Deposit Accounts” shall mean any Deposit Account, Securities Account or Commodity Account that is an Excluded Asset described in clause (6) of the definition of the term “Excluded Assets” in the Loan Agreement.
“Fixtures” shall mean “fixtures” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
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“General Intangible” shall mean any “general intangible” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Goods” shall mean “goods” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Instrument” shall mean “instruments” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Intellectual Property Rights” means all rights anywhere in the world arising under or associated with the following: copyrights, Internet domain names and associated URL addresses, trademarks, service marks, trade dress and trade names, patents, trade secrets, confidential or proprietary information, and any other similar or equivalent intellectual property rights.
“Interest Rate Protection Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement or other similar agreement or arrangement.
“Inventory” shall mean merchandise, inventory and goods, and all additions, substitutions and replacements thereof and all accessions thereto, wherever located, together with all goods, supplies, incidentals, packaging materials, labels, materials and any other items used or usable in manufacturing, processing, packaging or shipping same, in all stages of production from raw materials through work in process to finished goods, and all products and proceeds of whatever sort and wherever located any portion thereof which may be returned, rejected, reclaimed or repossessed by the Collateral Agent from any Assignor’s customers, and shall specifically include all “inventory” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Investment Property” shall mean “investment property” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Letter of Credit” shall mean “letter of credit” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Letter-of-Credit Rights” shall mean “letter-of-credit rights” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Location” of any Assignor, shall mean such Assignor’s “location” as determined pursuant to Section 9-307 of the UCC.
“Marks” shall mean all right, title and interest in and to any trademarks, service marks, trade dress and trade names now or hereafter owned by any Assignor, including any registration or application for registration of any trademarks and service marks, which are registered or filed in the United States Patent and Trademark Office or the equivalent thereof in any state of the United States or any equivalent foreign office or agency, as well as any unregistered trademarks and service marks now or hereafter owned by any Assignor.
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“Material Adverse Effect” shall mean (i) a material adverse effect on the business, operations, property, assets, liabilities, condition (financial or otherwise) or operating results of Company and its Restricted Subsidiaries taken as a whole, or (ii) a material adverse effect (x) on the rights or remedies of the Collateral Agent hereunder or under any other Facility Document, (y) on the ability of any Assignor to perform its obligations to the Collateral Agent hereunder or under any other Facility Document or (z) the legality, validity, binding effect or enforceability of this Agreement or any of the other Facility Documents.
“Other Hedging Agreements” shall mean any foreign exchange contracts, currency swap agreements, commodity agreements or other similar arrangements, or arrangements designed to protect against fluctuations in currency values or commodity prices.
“Patents” shall mean any patent now or hereafter owned by an Assignor, and any divisions, continuations (including, but not limited to, continuations-in-parts) and improvements thereof, as well as any application for a patent now or hereafter owned by any Assignor.
“Permits” shall mean, to the extent permitted to be assigned by the terms thereof or by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations of or from any governmental authority or agency.
“Proceeds” shall mean all “proceeds” as such term is defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof and, in any event, shall also include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or any Assignor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Assignor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.
“Registered Organization” shall have the meaning provided in the Uniform Commercial Code as in effect in the State of New York.
“Secured Obligations” shall mean, collectively, the Obligations of the Borrower and each Assignor or Guarantor and the Guaranteed Obligations of each Guarantor.
“Securities Accounts” shall mean all “securities accounts” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Software” shall mean “software” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Supporting Obligations” shall mean any “supporting obligation” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor, or in which any Assignor has any rights, and, in any event, shall include, but shall not be limited to all of such Assignor’s rights in any Letter or Credit or Letter-of-Credit Right or secondary obligation that supports the payment or performance of, and all security for, any Account, Chattel Paper, Document, General Intangible, Instrument or Investment Property.
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“Tangible Chattel Paper” shall mean “tangible chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Termination Date” shall mean the date of the repayment of the Loans in full and the termination of the Commitments (other than Additional Secured Obligations and contingent indemnification or expense reimbursement obligations not then due).
“Timber-to-be-Cut” shall mean “timber-to-be-cut” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Trade Secrets” shall mean all confidential or proprietary information owned by an Assignor in each case that is held as a trade secret and from which an Assignor derives independent economic value, including without limitation, know-how, manufacturing and production processes and techniques, inventions, research and development information, databases and data, including, without limitation, technical data, financial, design, manufacturing, engineering, assembly, installation, use, operation, sales, servicing, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information.
“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.
Article X
MISCELLANEOUS
10.1 Notices. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by hand or overnight courier service, mailed by certified or registered mail or sent by electronic mail. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received. Notices delivered through electronic communications to the extent provided in Section 9.02(b) of the Loan Agreement, shall be effective as provided in such Section 9.02(b) of the Loan Agreement. All notices and other communications shall be in writing and addressed as follows:
(a) if to any Assignor, c/o:
CURO Group Holdings Corp.
200 W. Hubbard Street, 8th Floor
Chicago IL 60654
Attention: Chief Executive Officer
Email: [***]
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(b) if to the Collateral Agent, at:
Alter
Domus (US) LLC, as Collateral Agent
225 W. Washington, 9th Fl
Chicago, IL 60606
Attention: Olivia Otis
Email: Legal_agency@alterdomus.com;
CPCagency@alterdomus.com
With a copy (which shall not constitute notice) to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: [***]
Email: [***]
or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.
10.2 Waiver; Amendment. Except as provided in Sections 10.8 and 10.12 hereof (or as provided in the other Collateral Documents), none of the terms and conditions of this Agreement or any other Collateral Document may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Assignor directly affected thereby (it being understood that the addition or release of any Assignor hereunder shall not constitute a change, waiver, discharge or termination affecting any Assignor other than the Assignor so added or released) and the Collateral Agent (with the written consent of the requisite percentage of the Lenders in accordance with the Loan Agreement).
10.3 Obligations Absolute. The obligations of each Assignor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of such Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or any other Facility Document; or (c) any amendment to or modification of any Facility Document or any security for any of the Secured Obligations; whether or not such Assignor shall have notice or knowledge of any of the foregoing.
10.4 Successors and Assigns. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 10.8 hereof, (ii) be binding upon each Assignor, its successors and permitted assigns; provided, however, that no Assignor shall assign any of its rights or obligations hereunder without the prior written consent of the Collateral Agent (with the prior written consent of the requisite percentage of the Lenders in accordance with the Loan Agreement) or as otherwise permitted by the Facility Documents, and (iii) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other Secured Parties and their respective successors, transferees and permitted assigns. All agreements, statements, representations and warranties made by each Assignor herein or in any certificate or other instrument delivered by such Assignor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Parties and shall survive the execution and delivery of this Agreement and the other Facility Documents regardless of any investigation made by the Secured Parties or on their behalf.
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10.5 Headings Descriptive. The headings of the several sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. Section 9.06 of the Loan Agreement is hereby incorporated by this reference, mutatis mutandis.
10.7 Assignor’s Duties. It is expressly agreed, anything herein contained to the contrary notwithstanding, that, prior to the Termination Date, each Assignor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Assignor under or with respect to any Collateral.
10.8 Termination; Release. (a) After the Termination Date, this Agreement shall automatically and irrevocably terminate (provided that all indemnities set forth herein including, without limitation in Section 8.1 hereof, shall survive such termination) and the Collateral Agent, at the written request and expense of the respective Assignor, will promptly execute and deliver to such Assignor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement.
(b) The Liens securing the Collateral may be released from time to time in accordance with Section 8.08 of the Loan Agreement. Furthermore, upon the release of any Guarantor from its Guaranteed Obligations in accordance with the provisions of the Loan Agreement, such Assignor (and the Collateral at such time assigned by the respective Assignor pursuant hereto) shall be automatically and irrevocably released from this Agreement.
(c) The Collateral Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Collateral by it in accordance with (or which the Collateral Agent in the absence of gross negligence and willful misconduct believes to be in accordance with) this Section 10.8.
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10.9 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart hereof by facsimile or electronic transmission shall be effective as delivery of an original executed counterpart hereof. A set of counterparts executed by all the parties hereto shall be lodged with the Company and the Collateral Agent.
10.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
10.11 The Collateral Agent and the Other Secured Parties. The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in the Loan Agreement. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in the Loan Agreement. The provisions of Article VIII of the Loan Agreement shall inure to the benefit of the Collateral Agent, and shall be binding upon all Assignors and all Secured Parties, in connection with this Agreement and the other Facility Documents. Without limiting the generality of the foregoing, (i) the Collateral Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing and (ii) the Collateral Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Facility Documents that the Collateral Agent is required in writing to exercise by the Required Lenders. Notwithstanding anything to the contrary in this Agreement or otherwise, in no event shall the Collateral Agent be responsible for, or have any duty or obligation with respect to, the recording, filing, registering, perfection, continuation, protection or maintenance of the security interests or Liens intended to be created by this Agreement (including the preparation, filing or continuation of any Uniform Commercial Code financing or continuation statements or similar documents or instruments), nor shall the Collateral Agent be responsible for, and the Collateral Agent makes no representation regarding, the validity, enforceability, effectiveness or priority of this Agreement or the security interests or Liens intended to be created hereby.
10.12 Additional Assignors. It is understood and agreed that any Guarantor that desires to become an Assignor hereunder, or is required to execute a counterpart of this Agreement after the date hereof pursuant to the requirements of the Loan Agreement or any other Facility Document, shall become an Assignor hereunder by (x) executing a joinder agreement in the form of Annex O hereto and delivering same to the Collateral Agent, in each case as may be requested by (and in form and substance reasonably satisfactory to) the Collateral Agent, (y) delivering supplements to Annexes A through F, inclusive, H through K, inclusive, and P through S, inclusive, hereto as are necessary to cause such Annexes to be complete and accurate with respect to such additional Assignor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Assignor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken.
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10.13 Intercreditor Agreement. Without limiting the generality of the final paragraph of Section 1.1(b): the Liens granted hereunder in favor of the Collateral Agent for the benefit of the Secured Parties in respect of the Collateral and the exercise of any right related thereto thereby shall be subject, in each case, to the terms of the Intercreditor Agreement.
[Remainder of this page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first above written.
| CURO GROUP HOLDINGS CORP., | ||
| as an Assignor | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | Chief Executive Officer | |
| CURO FINANCIAL TECHNOLOGIES CORP. | ||
| CURO INTERMEDIATE HOLDINGS CORP. | ||
| CURO MANAGEMENT LLC | ||
| SOUTHERNCO, INC. | ||
| FIRST HERITAGE CREDIT, LLC | ||
| FIRST HERITAGE CREDIT OF ALABAMA, LLC | ||
| FIRST HERITAGE CREDIT OF LOUISIANA, LLC | ||
| FIRST HERITAGE CREDIT OF MISSISSIPPI, LLC | ||
| FIRST HERITAGE CREDIT OF SOUTH CAROLINA, LLC | ||
| FIRST HERITAGE CREDIT OF TENNESSEE, LLC | ||
| each as an Assignor | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
[Signature Page to Security Agreement]
| CURO VENTURES, LLC | ||
| ATTAIN FINANCE, LLC | ||
| AD ASTRA RECOVERY SERVICES, INC. | ||
| CURO COLLATERAL SUB, LLC | ||
| CURO CREDIT, LLC | ||
| SOUTHERN FINANCE OF SOUTH CAROLINA, INC. | ||
| SOUTHERN FINANCE OF TENNESSEE, INC. | ||
| COVINGTON CREDIT, INC. | ||
| COVINGTON CREDIT OF GEORGIA, INC. | ||
| COVINGTON CREDIT OF ALABAMA, INC. | ||
| COVINGTON CREDIT OF TEXAS, INC. | ||
| HEIGHTS FINANCE HOLDING CO. | ||
| HEIGHTS FINANCE CORPORATION, an Illinois corporation | ||
| HEIGHTS FINANCE CORPORATION, a Tennessee corporation | ||
| QUICK CREDIT CORPORATION | ||
| each as an Assignor | ||
| By: | /s/ Gary L. Fulk | |
| Name: | Gary L. Fulk | |
| Title: | President | |
| ENNOBLE FINANCE, LLC | ||
| as an Assignor | ||
| By: Curo Intermediate Holdings Corp. | ||
| Its: Sole Member | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
[Signature Page to Security Agreement]
Accepted and Agreed to:
| ALTER DOMUS (US) LLC, | ||
| as Collateral Agent | ||
| By: | /s/ Matthew Trybula | |
| Name: | Matthew Trybula | |
| Title: | Associate Counsel | |
[Signature Page to Security Agreement]
Exhibit 10.4
Execution Version
PLEDGE AGREEMENT
among
CURO GROUP HOLDINGS CORP.,
CERTAIN SUBSIDIARIES OF CURO GROUP HOLDINGS CORP.
and
ALTER DOMUS (US) LLC,
as COLLATERAL
AGENT
Dated as of May 15, 2023
Table of Contents
| ANNEX A | - | SCHEDULE OF SUBSIDIARIES |
| ANNEX B | - | SCHEDULE OF STOCK |
| ANNEX C | - | SCHEDULE OF NOTES |
| ANNEX D | - | SCHEDULE OF LIMITED LIABILITY COMPANY INTERESTS |
| ANNEX E | - | SCHEDULE OF PARTNERSHIP INTERESTS |
| ANNEX F | - | FORM OF AGREEMENT REGARDING UNCERTIFICATED SECURITIES, LIMITED LIABILITY COMPANY INTERESTS AND PARTNERSHIP INTERESTS |
| ANNEX G | - | FORM OF PLEDGE AGREEMENT JOINDER |
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Agreement”), dated as of May 15, 2023, is among each of the undersigned pledgors (each, a “Pledgor” and, together with any other entity that becomes a pledgor hereunder pursuant to Section 30 hereof, the “Pledgors”) and Alter Domus (US) LLC, as Collateral Agent, for the benefit of the Secured Parties. Except as otherwise defined herein, all capitalized terms used herein and defined in the Loan Agreement (as defined below) shall be used herein as therein defined.
WHEREAS, CURO Group Holdings Corp. (the “Company”), the Guarantors from time to time party thereto, each Lender from time to time party thereto and the Collateral Agent and Administrative Agent, have entered into that certain First Lien Credit Agreement, dated as of May 15, 2023 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”);
WHEREAS, pursuant to the Loan Agreement, each Pledgor has jointly and severally guaranteed to the Secured Parties the payment when due of all Guaranteed Obligations as described (and defined) therein;
WHEREAS, in order to induce (i) the Lenders to make Loans to the Company pursuant to the terms of the Loan Agreement and (ii) the Collateral Agent to act as collateral agent, the Pledgors have agreed to grant to the Collateral Agent a valid, perfected first priority security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, their respective Secured Obligations (as defined in the Security Agreement);
WHEREAS, the Intercreditor Agreement governs the relative rights and priorities of the Secured Parties, the 1.5 Lien Notes Secured Parties (as defined therein) and the Second Lien Notes Secured Parties (as defined therein) in respect of all of the Collateral; and
WHEREAS, the Pledgors will obtain benefits from the making of the Loans pursuant to the Loan Agreement, and, accordingly, the Pledgors desire to create a security interest in favor of and pledge of the pledged Collateral to the Collateral Agent for its benefit and for the benefit of the Secured Parties under the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Secured Parties and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Parties as follows:
| 1. | SECURITY FOR OBLIGATIONS. (a) This Agreement is made by each Pledgor for the benefit of the Secured Parties to secure the Secured Obligations, it being acknowledged and agreed that the “Secured Obligations” shall include the Loans described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement. |
(b) Notwithstanding anything herein to the contrary, the lien and security interest granted pursuant to this Agreement and the exercise of any right or remedy hereunder are subject to the provisions of the Intercreditor Agreement at any time the Intercreditor Agreement is in effect. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control at any time the Intercreditor Agreement is in effect. In the event of any conflict or inconsistency between the provisions of the Loan Agreement and this Agreement relating to the duties of the Collateral Agent the provisions of the Loan Agreement shall govern and control.
| 2. | DEFINITIONS. (a) Unless otherwise defined herein, all capitalized terms used herein and defined in the Loan Agreement shall be used herein as therein defined. Reference to singular terms shall include the plural and vice versa. |
| (b) | The following capitalized terms used herein shall have the definitions specified below: |
“1.5L Notes Secured Parties” shall have the meaning provided in the Intercreditor Agreement.
“Adverse Claim” shall have the meaning given such term in Section 8-102(a)(1)of the UCC.
“Agreement” shall have the meaning set forth in the first paragraph hereof.
“Certificated Security” shall have the meaning given such term in Section 8-102(a)(4) of the UCC.
“Clearing Corporation” shall have the meaning given such term in Section 8- 102(a)(5) of the UCC.
“Collateral” shall have the meaning set forth in Section 3.1 hereof.
“Collateral Accounts” shall mean any and all accounts established and maintained by the Collateral Agent in the name of any Pledgor to which Collateral may be credited.
“Company” shall have the meaning set forth in the recitals hereto.
“Domestic Corporation” shall have the meaning set forth in the definition of “Stock”.
“Event of Default” shall mean an “Event of Default” or similar term as such term is defined in the Loan Agreement, so long as any such agreement is in effect.
“Exempted Foreign Entity” shall mean any CFC (other than a Canadian Subsidiary).
“Financial Asset” shall have the meaning given such term in Section 8-102(a)(9) of the UCC.
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“First Lien Creditors” shall have the meaning provided in the Intercreditor Agreement.
“Foreign Corporation” shall have the meaning set forth in the definition of “Stock”.
“Instrument” shall have the meaning given such term in Section 9-102(a)(47) of the UCC.
“Investment Property” shall have the meaning given such term in Section 9-102(a)(49) of the UCC.
“Limited Liability Company Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned by any Pledgor or represented by any Limited Liability Company Interest.
“Limited Liability Company Interests” shall mean the entire limited liability company membership interest at any time owned by any Pledgor in any limited liability company.
“Loan Agreement” shall have the meaning set forth in the recitals hereto.
“Location” of any Pledgor has the meaning given such term in Section 9-307 of the UCC.
“Non-Voting Equity Interests” shall mean all Equity Interests of any Person that are not Voting Equity Interests.
“Notes” shall mean (x) all intercompany notes at any time issued to each Pledgor and (y) all other promissory notes from time to time issued to, or held by, each Pledgor.
“Partnership Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned by any Pledgor or represented by any Partnership Interest.
“Partnership Interest” shall mean the entire general partnership interest or limited partnership interest at any time owned by any Pledgor in any general partnership or limited partnership.
“Pledged Notes” shall mean all Notes at any time pledged or required to be pledged hereunder.
“Pledgor” shall have the meaning set forth in the first paragraph hereof.
“Proceeds” shall have the meaning given such term in Section 9-102(a)(64) of the UCC.
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“Registered Organization” shall have the meaning given such term in Section 9-102(a)(71) of the UCC.
“Second Lien Agent” shall have the meaning provided in the Intercreditor Agreement.
“Second Lien Notes Secured Parties” shall have the meaning provided in the Intercreditor Agreement.
“Secured Obligations” shall have the meaning provided in the Security Agreement.
“Secured Parties” shall have the meaning provided in the Security Agreement.
“Securities Intermediary” shall have the meaning given such term in Section 8-102(a)(14) of the UCC.
“Security” and “Securities” shall have the meaning given such term in Section 8- 102(a)(15) of the UCC and shall in any event also include all Stock and all Notes.
“Security Entitlement” shall have the meaning given such term in Section 8-102(a)(17) of the UCC.
“Stock” shall mean (x) with respect to corporations incorporated under the laws of the United States or any State thereof or the District of Columbia (each, a “Domestic Corporation”), all of the issued and outstanding shares of capital stock of any Domestic Corporation at any time owned by any Pledgor and (y) with respect to corporations not Domestic Corporations (each, a “Foreign Corporation”), all of the issued and outstanding shares of capital stock of any Foreign Corporation at any time owned by any Pledgor.
“Termination Date” shall mean the date of the repayment of the Loans in full and the termination of all Commitments (other than Additional Secured Obligations and contingent indemnification or expense reimbursement obligations not then due).
“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York from time to time; provided that all references herein to specific Sections or subsections of the UCC are references to such Sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of New York on the date hereof.
“Uncertificated Security” shall have the meaning given such term in Section 8- 102(a)(18) of the UCC.
“Voting Equity Interests” of any Person shall mean all classes of Equity Interests of such Person entitled to vote.
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| 3. | PLEDGE OF SECURITIES, ETC. |
3.1 Pledge. To secure the Secured Obligations now or hereafter owed or to be performed by such Pledgor, each Pledgor does hereby grant, pledge and assign to the Collateral Agent for the benefit of the Secured Parties, and does hereby create a continuing security interest in favor of the Collateral Agent for the benefit of the Secured Parties in and a continuing lien on, all of its right, title and interest in and to the following, whether now existing or hereafter from time to time acquired, wherever located (collectively, the “Collateral”):
| (a) | each of the Collateral Accounts (to the extent a security interest therein is not created pursuant to the Security Agreement), including any and all assets of whatever type or kind deposited by such Pledgor in any such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, monies, checks, drafts, Instruments, Securities or interests therein of any type or nature deposited or required by the Facility Documents to be deposited in such Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing; |
| (b) | all Securities owned or held by such Pledgor from time to time and all options and warrants owned by such Pledgor from time to time to purchase Securities; |
| (c) | to the extent not otherwise included, all rights of any nature whatsoever in respect of the Securities owned or held by such Pledgor from time to time, including, without limitation, all voting rights and economic rights in the Pledgor of the Securities; |
| (d) | all Limited Liability Company Interests owned by such Pledgor from time to time and all of its right, title and interest in each limited liability company to which each such Limited Liability Company Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Limited Liability Company Interests and applicable law: |
(A) all its capital therein and its interest in all profits, income, surpluses, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests;
(B) all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;
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(C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests;
(D) all present and future claims, if any, of such Pledgor against any such limited liability company for monies loaned or advanced, for services rendered or otherwise;
(E) all of such Pledgor’s rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any such limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Limited Liability Company Interests and any such limited liability company, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and
(F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;
| (e) | all Partnership Interests owned by such Pledgor from time to time and all of its right, title and interest in each partnership to which each such Partnership Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Partnership Interests and applicable law: |
(A) all its capital therein and its interest in all profits, income, surpluses, losses, Partnership Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Partnership Interests;
(B) all other payments due or to become due to such Pledgor in respect of Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;
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(C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of such Pledgor against any such partnership for monies loaned or advanced, for services rendered or otherwise;
(E) all of such Pledgor’s rights under any partnership agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Partnership Interests and any such partnership, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and
(F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;
| (f) | all Financial Assets and Investment Property owned by such Pledgor from time to time; |
| (g) | all Security Entitlements owned by such Pledgor from time to time in any and all of the foregoing; and |
| (h) | all Proceeds of any and all of the foregoing; |
provided that (x) no Pledgor shall be required at any time to pledge hereunder more than 65.0% of all of the outstanding voting Capital Stock of any direct Exempted Foreign Entity and (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each direct Exempted Foreign Entity at any time and from time to time acquired by such Pledgor, which Non-Voting Equity Interests shall not be subject to the limitations described in preceding clause (x).
Notwithstanding any of the other provisions set forth in this Section 3.1 to the contrary, the term Collateral shall not include, and this Agreement shall not constitute a grant of a security interest in any Excluded Assets; provided that immediately upon the ineffectiveness, lapse or termination of any restriction or condition covering, or resulting in, any asset or other property of a Pledgor constituting Excluded Assets, the Collateral shall (in the absence of any other applicable limitation) include, and such Pledgor shall be deemed to have granted a security interest in, such Pledgor’s right, title and interest in and to such asset or other property and such asset or other property shall no longer constitute Excluded Assets.
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3.2 Procedures. (a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by such Pledgor) be pledged pursuant to Section 3.1 of this Agreement, subject to the provisions of the Intercreditor Agreement, and, in addition thereto, such Pledgor shall (to the extent provided below) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral (or such longer period as agreed to by the Collateral Agent in its sole discretion)) for the benefit of the Collateral Agent and the other Secured Parties:
(i) with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall physically deliver such Certificated Security to the Collateral Agent, endorsed in blank;
(ii) with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall cause the issuer of such Uncertificated Security to either (A) issue to such Pledgor a Certificated Security in lieu of such Uncertificated Security and follow the procedure set forth in Section 3.2(a)(i) hereof or (B) duly authorize, execute, and deliver to the Collateral Agent, an agreement for the benefit of the Collateral Agent and the other Secured Parties substantially in the form of Annex F hereto pursuant to which such issuer agrees to comply with any and all instructions originated by the Collateral Agent without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security (and any Partnership Interests and Limited Liability Company Interests issued by such issuer) originated by any other Person other than a court of competent jurisdiction (it being understood that the Collateral Agent only will give such instructions to any issuer upon the occurrence and during the continuance of an Event of Default);
(iii) with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), such Pledgor shall promptly notify the Collateral Agent thereof and shall promptly take (x) all actions required (i) to comply with the applicable rules of such Clearing Corporation or Securities Intermediary and (ii) to perfect the security interest of the Collateral Agent under applicable law (including, in any event, under Sections 9-314(a), (b) and (c), 9-106 and 8-106(d) of the UCC) and (y) such other actions as shall be necessary or desirable to effect the foregoing;
(iv) with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), (1) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate and is a Security for purposes of the UCC, such Pledgor shall follow the procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate or is not a Security for purposes of the UCC, such Pledgor shall follow the procedure set forth in Section 3.2(a)(ii) hereof;
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(v) with respect to any Note (other than Notes with an individual principal amount of $250,000 or less at any time outstanding), physical delivery of such Note to the Collateral Agent, endorsed in blank; and
(vi) with respect to cash proceeds from any of the Collateral described in Section 3.1 hereof, (i) establishment by the Collateral Agent of a cash account (unless such an account is already in existence) in the name of such Pledgor over which the Collateral Agent shall have “control” within the meaning of the UCC and at any time any Event of Default is in existence no withdrawals or transfers may be made therefrom by any Person except with the prior written consent of the Collateral Agent and (ii) deposit of such cash in such cash account.
| (b) | In addition to the actions required to be taken pursuant to Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Collateral: |
(i) with respect to all Collateral of such Pledgor whereby or with respect to which the Collateral Agent may obtain “control” thereof within the meaning of Section 8106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of New York), such Pledgor shall take all actions as may be reasonably necessary or as reasonably requested from time to time by the Collateral Agent so that “control” of such Collateral is obtained and at all times held by the Collateral Agent; and
(ii) each Pledgor shall from time to time cause appropriate financing statements (on appropriate forms) under the Uniform Commercial Code as in effect in the various relevant States, covering all Collateral hereunder, to be filed in the relevant filing offices so that at all times the Collateral Agent’s security interest in all Investment Property and other Collateral which can be perfected by the filing of such financing statements (in each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States, including without limitation, Section 9-312(a) of the UCC) is so perfected.
3.3 Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase, stock dividend, distribution or otherwise) any additional Collateral at any time or from time to time after the date hereof, (i) such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, such Pledgor will thereafter take (or cause to be taken) all action (as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral (or such longer period as agreed to by the Collateral Agent in its sole discretion)) with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver to the Collateral Agent (i) a certificate executed by an Authorized Officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Collateral Agent for the benefit of the Secured Parties hereunder and (ii) supplements to Annexes A through G hereto as are necessary to cause such Annexes to be complete and accurate at such time. Without limiting the foregoing, each Pledgor shall be required to pledge hereunder the Equity Interests of any Exempted Foreign Entity at any time and from time to time after the date hereof acquired by such Pledgor, provided that (x) no Pledgor shall be required at any time to pledge hereunder more than 65.0% of all of the outstanding voting Capital Stock of any direct Exempted Foreign Entity and (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each direct Exempted Foreign Entity at any time and from time to time acquired by such Pledgor.
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3.4 Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required, or such other documentation reasonably satisfactory to the Collateral Agent as will establish that any applicable tax has been paid, in connection with the pledge of such Collateral.
3.5 Certain Representations and Warranties Regarding the Collateral. Each Pledgor represents and warrants that on the date hereof: (i) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in Annex A hereto; (ii) the Stock (and any warrants or options to purchase Stock) constituting Collateral held by such Pledgor consists of the number and type of shares of the stock (or warrants or options to purchase any stock) of the corporations as described in Annex B hereto; (iii) such Stock referenced in clause (ii) of this paragraph constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex B hereto; (iv) the Notes with a principal amount greater than $250,000 held by such Pledgor consist of the promissory notes described in Annex C hereto where such Pledgor is listed as the lender; (v) the Limited Liability Company Interests constituting Collateral held by such Pledgor consist of the number and type of interests of the Persons described in Annex D hereto; (vi) each such Limited Liability Company Interest referenced in clause (v) of this paragraph constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Annex D hereto; (vii) the Partnership Interests constituting Collateral held by such Pledgor consist of the number and type of interests of the Persons described in Annex E hereto; (viii) each such Partnership Interest referenced in clause (vii) of this paragraph constitutes that percentage or portion of the entire Partnership Interest of the partnership as set forth in Annex E hereto; (ix) the exact address of the chief executive officer of each such Pledgor is listed on Annex A to the Security Agreement; (x) the Pledgor has complied with the respective procedure set forth in Section 3.2(a) hereof with respect to each item of Collateral described in Annexes C through F hereto; and (xi) on the date hereof, such Pledgor owns no other Securities, Stock, Notes, Limited Liability Company Interests or Partnership Interests, in each case constituting Collateral, other than those listed in Annexes C through F hereof.
| 4. | APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Collateral Agent shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral, which may be held in the name of the relevant Pledgor, endorsed or assigned in blank. |
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| 5. | VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there shall have occurred and be continuing an Event of Default, each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; provided that, in each case, no vote shall be cast or any consent, waiver or ratification given or any action taken or omitted to be taken which would violate, result in a breach of any covenant contained in, or be inconsistent with any of the terms of any Facility Document, or which could reasonably be expected to have the effect of materially impairing the value of the Collateral or any part thereof or in a manner adverse to the position or interests of the Collateral Agent or any other Secured Party in the Collateral, unless expressly permitted by the terms of the Facility Documents. All such rights of each Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default has occurred and is continuing, and Section 7 hereof shall become applicable. |
| 6. | DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall have occurred and be continuing an Event of Default, all cash dividends, cash distributions, cash Proceeds and other cash amounts payable in respect of the Collateral shall be paid to the respective Pledgor. The Collateral Agent shall be entitled to receive directly, and to retain as part of the Collateral in each case to the extent required to be pledged and delivered hereunder: |
| (a) | all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property paid or distributed by way of dividend or otherwise in respect of the Collateral; |
| (b) | all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash (although such cash may be paid directly to the respective Pledgor so long as no Event of Default then exists)) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and |
| (c) | all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash (although such cash may be paid directly to the respective Pledgor so long as no Event of Default has occurred and is continuing)) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate or other reorganization. |
Nothing contained in this Section 6 shall limit or restrict in any way the Collateral Agent’s right to receive the proceeds of the Collateral in any form in accordance with Section 3 of this Agreement. All dividends, distributions or other payments which are received by any Pledgor contrary to the provisions of this Section 6 or Section 7 hereof shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Pledgor and shall be forthwith paid over to the Collateral Agent as Collateral in the same form as so received (with any necessary endorsement).
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| 7. | REMEDIES IN CASE OF AN EVENT OF DEFAULT. If there shall have occurred and be continuing an Event of Default, then and in every such case, subject to the provisions of the Intercreditor Agreement the Collateral Agent shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement, any other Facility Document or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Collateral Agent shall be entitled to exercise all the rights and remedies of a secured party under the UCC as in effect in any relevant jurisdiction and also shall be entitled, without limitation, to exercise the following rights, which each Pledgor hereby agrees to be commercially reasonable: |
| (a) | to receive all amounts payable in respect of the Collateral otherwise payable under Section 6 hereof to the respective Pledgor; |
| (b) | to transfer all or any part of the Collateral into the Collateral Agent’s name or the name of its nominee or nominees; |
| (c) | to accelerate any Pledged Note which may be accelerated in accordance with its terms, and take any other lawful action to collect upon any Pledged Note (including, without limitation, to make any demand for payment thereon); |
| (d) | to vote (and exercise all rights and powers in respect of voting) all or any part of the Collateral (whether or not transferred into the name of the Collateral Agent) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Collateral Agent the proxy and attorney-in- fact of such Pledgor, with full power of substitution to do so); |
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| (e) | at any time and from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or, notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise purchase or dispose (all of which are hereby waived by each Pledgor to the extent permitted by applicable law), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price or prices and on such terms as the Collateral Agent in compliance with any mandatory requirements of applicable law may determine, provided at least 10 days’ written notice of the time and place of any such sale shall be given to the respective Pledgor. The Collateral Agent shall not be obligated to make any such sale of Collateral regardless of whether any such notice of sale has theretofore been given. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security or the Secured Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Collateral Agent on behalf of the Secured Parties may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Collateral Agent nor any other Secured Party shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto; and |
| (f) | to set off any and all Collateral against any and all Secured Obligations, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Secured Obligations. |
| 8. | REMEDIES, CUMULATIVE, ETC. Each and every right, power and remedy of the Collateral Agent provided for in this Agreement or in any other Facility Document, or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Collateral Agent or any other Secured Party of any one or more of the rights, powers or remedies provided for in this Agreement or any other Facility Document or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Collateral Agent or any other Secured Party of all such other rights, powers or remedies, and no failure or delay on the part of the Collateral Agent or any other Secured Party to exercise any such right, power or remedy shall operate as a waiver thereof. No notice to or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent or any other Secured Party to any other or further action in any circumstances without notice or demand. The Secured Parties agree that this Agreement may be enforced only by the action of the Collateral Agent and that no other Secured Party shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Parties upon the terms of this Agreement and the Security Agreement. |
| 9. | APPLICATION OF PROCEEDS. Subject to the terms of the Intercreditor Agreement, all monies and other property and assets collected or received by the Collateral Agent or any other Secured Party upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies and other property and assets collected or received by the Collateral Agent hereunder or upon any distribution of (or on account of) Collateral (whether or not characterized as such) in connection with any case, proceeding or other action of the type described in Section 6.01(f) of the Loan Agreement, shall be applied in the manner provided in Section 7.4 of the Security Agreement. |
| (a) | It is understood and agreed that each Pledgor shall remain jointly and severally liable with respect to its Secured Obligations to the extent of any deficiency between the amount of the proceeds of the Collateral pledged by it hereunder and the aggregate amount of such Secured Obligations. |
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| 10. | PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Collateral Agent hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Collateral Agent or the officer making such sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication or nonapplication thereof. |
| 11. | INDEMNITY. The indemnity obligations of each Pledgor contained in this Section 11 shall continue in full force and effect notwithstanding the resignation or removal of the Collateral Agent, the full payment of all the Secured Obligations and notwithstanding the discharge thereof and the occurrence of the Termination Date. Section 9.04 of the Loan Agreement (Costs, Expenses and Indemnification) and the other rights, privileges and protections afforded the Collateral Agent under the Loan Agreement and the other Facility Documents are hereby incorporated by reference as if fully set forth herein mutatis mutandis. |
| 12. | COLLATERAL AGENT NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a) Nothing herein shall be construed to make the Collateral Agent or any other Secured Party liable as a member of any limited liability company or as a partner of any partnership and neither the Collateral Agent nor any other Secured Party by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become the absolute owner of Collateral consisting of a Limited Liability Company Interest or a Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Collateral Agent, any other Secured Party, any Pledgor and/or any other Person. |
| (b) | Except as provided in the last sentence of paragraph (a) of this Section 12, the Collateral Agent, by accepting this Agreement, did not intend to become a member of any limited liability company or a partner of any partnership or otherwise be deemed to be a co- venturer with respect to any Pledgor, any limited liability company, partnership and/or any other Person either before or after an Event of Default shall have occurred. The Collateral Agent shall have only those powers set forth herein and the Secured Parties shall assume none of the duties, obligations or liabilities of a member of any limited liability company or as a partner of any partnership or any Pledgor except as provided in the last sentence of paragraph (a) of this Section 12. |
| (c) | The Collateral Agent and the other Secured Parties shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected. |
| (d) | The acceptance by the Collateral Agent of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Collateral Agent or any other Secured Party to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral. |
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| 13. | FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees that it will join with the Collateral Agent in executing and, at such Pledgor’s own expense, file and refile under the UCC or other applicable law such financing statements, continuation statements and other documents, in such offices as shall be reasonably necessary or as the Collateral Agent may reasonably request and wherever required or permitted by law in order to perfect and preserve the Collateral Agent’s security interest in the Collateral hereunder and hereby authorizes the Collateral Agent to file financing statements and amendments thereto relative to all or any part of the Collateral (including, without limitation, financing statements which list the Collateral specifically and/or “all assets” as collateral without the signature of such Pledgor where permitted by law, and agrees to do such further acts and things and to execute and deliver to the Collateral Agent such additional conveyances, assignments, agreements and instruments as the Collateral Agent may reasonably request to carry into effect the purposes of this Agreement or to further assure and confirm unto the Collateral Agent its rights, powers and remedies hereunder or thereunder. |
| (b) | Each Pledgor hereby constitutes and appoints the Collateral Agent its true and lawful attorney-in-fact, irrevocably (until the termination of this Agreement in accordance with its terms or the release of such Pledgor from its obligations under this Agreement), with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from time to time solely after the occurrence and during the continuance of an Event of Default, to act, require, demand, receive, compound, recover, compromise and give acquittance for any and all monies and claims for monies due or to become due to such Pledgor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings and to execute any instrument which the Collateral Agent may request to accomplish the purposes of this Agreement, which appointment as attorney is coupled with an interest. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Assignor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final and non-appealable judgment. |
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| 14. | THE COLLATERAL AGENT. The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood, acknowledged and agreed by each Secured Party that by accepting the benefits of this Agreement each such Secured Party acknowledges and agrees that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement, the other Facility Documents and the Loan Agreement. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in the other Facility Documents and the Loan Agreement. The provisions of Article VIII of the Loan Agreement shall inure to the benefit of the Collateral Agent, and shall be binding upon all Pledgors and all Secured Parties, in connection with this Agreement and the other Facility Documents. Without limiting the generality of the foregoing, (i) the Collateral Agent shall not be subject to any trust, fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing and no implied covenants, responsibilities, duties, obligations or liabilities against the Collateral Agent shall be read into this Agreement and (ii) the Collateral Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Facility Documents that the Collateral Agent is required in writing to exercise by the Required Lenders. Notwithstanding anything to the contrary in this Agreement, in no event shall the Collateral Agent (i) be liable or responsible for, or have any duty or obligation with respect to, the recording, filing, registering, perfection, protection or maintenance of the security interests or Liens intended to be created by this Agreement (including the preparation, filing or continuation of any Uniform Commercial Code financing or continuation statements or similar documents or instruments), (ii) be liable for or responsible for, and the Collateral Agent makes no representation regarding, the validity, enforceability, effectiveness or priority of this Agreement or the security interests or Liens intended to be created hereby or (iii) be liable or responsible for any failure of the Pledgors or any party to the Intercreditor Agreement or the Facility Documents to perform its obligations hereunder or thereunder. |
| 15. | TRANSFER BY THE PLEDGORS. Except as permitted (i) prior to the date all Secured Obligations have been paid in full and (ii) thereafter, pursuant to the other Facility Documents, no Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein. |
| 16. | REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each Pledgor represents, warrants and covenants as to itself and each of its Subsidiaries that: |
(i) it is the legal, beneficial and record owner of, and has good and marketable title to, all of its Collateral consisting of one or more Securities, Partnership Interests and Limited Liability Company Interests and that it has sufficient interest in all of its Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except the liens and security interests created by this Agreement and Permitted Liens);
(ii) it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement;
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(iii) this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable against such Pledgor in accordance with its terms, except to the extent that the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law);
(iv) except to the extent already obtained or made, no consent of any other party (including, without limitation, any stockholder, partner, member or creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any Governmental Authority is required to be obtained by such Pledgor in connection with (a) the execution, delivery or performance of this Agreement by such Pledgor, (b) the validity or enforceability of this Agreement against such Pledgor (except as set forth in clause (iii) above), (c) the perfection or enforceability of the Collateral Agent’s security interest in such Pledgor’s Collateral or (d) except for compliance with or as may be required by applicable securities laws, the exercise by the Collateral Agent of any of its rights or remedies provided herein;
(v) neither the execution, delivery or performance by such Pledgor of this Agreement or any other Facility Document to which it is a party, nor compliance by it with the terms and provisions hereof and thereof nor the consummation of the transactions contemplated therein: (i) will contravene any provision of any applicable Legal Requirement or Governmental Authority, domestic or foreign, applicable to such Pledgor; (ii) will conflict or be inconsistent with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Collateral Documents and Permitted Liens) upon any of the properties or assets of such Pledgor or any of its Subsidiaries pursuant to the terms of any indenture, lease, mortgage, deed of trust, credit agreement, loan agreement or any other material agreement, contract or other instrument to which such Pledgor or any of its Subsidiaries is a party or is otherwise bound, or by which it or any of its properties or assets is bound or to which it may be subject; or (iii) will violate any provision of the Organizational Documents of such Pledgor or any of its Subsidiaries;
(vi) all of such Pledgor’s Collateral (consisting of Securities, Limited Liability Company Interests and Partnership Interests) has been duly and validly issued, is fully paid and non-assessable and is subject to no options to purchase or similar rights;
(vii) each of such Pledgor’s Pledged Notes constitutes, or when executed by the obligor thereof will constitute, the legal, valid and binding obligation of such obligor, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law);
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(viii) the pledge, collateral assignment and delivery to the Collateral Agent of such Pledgor’s Collateral consisting of Certificated Securities and Pledged Notes pursuant to this Agreement creates a valid and perfected first priority security interest in such Certificated Securities and Pledged Notes, and the proceeds thereof, subject to no prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien or encumbrance on the property or assets of such Pledgor which would include the Securities and the Collateral Agent is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfect security interests in respect of such Collateral; and
(ix) “control” (as defined in Section 8-106 of the UCC) has been obtained by the Collateral Agent over all of such Pledgor’s Collateral consisting of Securities (including, without limitation, Notes which are Securities) with respect to which such “control” may be obtained pursuant to Section 8-106 of the UCC, except to the extent that the obligation of the applicable Pledgor to provide the Collateral Agent with “control” of such Collateral has not yet arisen under this Agreement; provided that in the case of the Collateral Agent obtaining “control” over Collateral consisting of a Security Entitlement, such Pledgor shall have taken all steps in its control so that the Collateral Agent obtains “control” over such Security Entitlement.
| (b) | Each Pledgor covenants and agrees that it will defend the Collateral Agent’s right, title and security interest in and to such Pledgor’s Collateral and the proceeds thereof against the claims and demands of all persons whomsoever; and each Pledgor covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Collateral Agent by such Pledgor as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Collateral Agent and the other Secured Parties. |
| (c) | Each Pledgor covenants and agrees that it will take no action which would violate any of the terms of any Facility Document. |
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| 17. | Legal Names; Type of Organization (and Whether a Registered Organization); Jurisdiction of Organization; Location; Federal Employer Identification Number; Changes Thereto; etc. The exact legal name of each Pledgor, the type of organization of such Pledgor, the Location of such Pledgor and the federal employer identification number of such Pledgor (if any), is listed on Annex C to the Security Agreement. No Pledgor shall change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its jurisdiction of organization, its Location or its federal employer identification number (if any) except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Facility Documents and so long as same do not involve (x) a Registered Organization ceasing to constitute same or (y) any Pledgor changing its jurisdiction of organization or Location, as the case may be, from the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 5 Business Days’ prior written notice (or such shorter period as may be acceptable to the Collateral Agent in its sole discretion) of each change to the information listed on Annex A (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex A which shall correct all information contained therein for such Pledgor, and (ii) in connection with the respective change or changes, it shall have taken all action reasonably necessary or as reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. |
| 18. | PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever (other than termination of this Agreement pursuant to Section 20 hereof), including, without limitation: |
| (a) | any renewal, extension, amendment or modification of, or addition or supplement to or deletion from any Facility Document (other than this Agreement in accordance with its terms), or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof; |
| (b) | any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument including, without limitation, this Agreement (other than a waiver, consent or extension with respect to this Agreement in accordance with its terms); |
| (c) | any furnishing of any additional security to the Collateral Agent or its assignee or any acceptance thereof or any release of any security by the Collateral Agent or its assignee; |
| (d) | any limitation on any party’s liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; or |
| (e) | any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any Pledgor or any Subsidiary of any Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing. |
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| 19. | SALE OF COLLATERAL WITHOUT REGISTRATION. If at any time when the Collateral Agent shall exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests pursuant to Section 7 hereof, and such Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Collateral Agent may sell such Collateral or part thereof by private sale in such manner and under such circumstances as the Collateral Agent may reasonably deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Collateral Agent (i) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under such Securities Act, (ii) may approach and negotiate with a single possible purchaser to effect such sale, and (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Collateral at a price which the Collateral Agent, in its sole and absolute discretion, may in in the absence of gross negligence or willful misconduct deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until the registration as aforesaid. |
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| 20. | TERMINATION; RELEASE. (a) On the Termination Date, this Agreement and the security interest created hereby shall automatically and irrevocably terminate (provided that all indemnities set forth herein including, without limitation, in Section 11 hereof shall survive any such termination) and the Collateral Agent, at the written request and sole expense of such Pledgor, will execute and deliver to such Pledgor a proper instrument or instruments (including UCC termination statements and control agreement terminations) acknowledging the satisfaction and termination of this Agreement (including, without limitation, UCC termination statements and instruments of satisfaction, discharge and/or reconveyance), and will automatically and irrevocably be released from the security interest created hereby and will promptly assign, transfer and deliver to such Pledgor or its designee on behalf of such Pledgor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any moneys at the time held by the Collateral Agent or any of its sub-agents hereunder and, with respect to any Collateral consisting of an Uncertificated Security, a Partnership Interest or a Limited Liability Company Interest (other than an Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), a termination of the agreement relating thereto executed and delivered by the issuer of such Uncertificated Security pursuant to Section 3.2(a)(ii) or by the respective partnership or limited liability company pursuant to Section 3.2(a)(iv)(2). |
| (b) | In the event that any part of the Collateral is sold or otherwise disposed of (to a Person other than a Secured Party) at any time prior to the Termination Date, in connection with a sale or disposition permitted by the Loan Agreement or is otherwise released in accordance with the terms of the Facility Documents and the proceeds of such sale or disposition (or from such release) are applied in accordance with the terms of the Facility Documents to the extent required to be so applied, the Collateral Agent, at the written request and sole expense of such Pledgor, will duly release from the security interest created hereby (and will execute and deliver such documentation, including termination or partial release statements and the like in connection therewith) and assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or released and as may be in the possession of the Collateral Agent (or, in the case of Collateral held by any sub-agent designated pursuant to Section 4 hereof, such sub-agent) and has not theretofore been released pursuant to this Agreement. |
| (c) | At any time that any Pledgor desires that Collateral be released as provided in the foregoing Section 20(a) or (b), it shall deliver to the Collateral Agent (and the relevant sub-agent, if any, designated pursuant to Section 4 hereof) a certificate signed by an authorized officer of such Pledgor certifying that the release of the respective Collateral is permitted pursuant to the Facility Documents, including Section 20(a) or (b) hereof. |
| (d) | The Collateral Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Collateral by it in accordance with (or which the Collateral Agent in the absence of gross negligence and willful misconduct believes to be in accordance with) this Section 20. |
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| 21. | NOTICES, ETC. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Collateral Agent or any Pledgor shall not be effective until received by the Collateral Agent or such Pledgor, as the case may be. All notices and other communications shall be in writing and addressed as follows: |
| (a) | if to any Pledgor, at its address set forth in the Security Agreement; |
| (b) | if to the Collateral Agent, at: |
Alter Domus (US) LLC
225 W. Washington, 9th Fl
Chicago, IL 60606
Email: Legal_agency@alterdomus.com;
CPCagency@alterdomus.com
Attention: Olivia Otis
With a copy (which shall not constitute notice) to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Email: [***]
Attention: [***]
or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.
| 22. | WAIVER; AMENDMENT. Except as provided in Sections 30 and 32 hereof, none of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever except in accordance with the requirements specified in the Security Agreement and the Loan Agreement. |
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| 23. | SUCCESSORS AND ASSIGNS. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 20 hereof, (ii) be binding upon each Pledgor, its successors and permitted assigns; provided, however, that no Pledgor shall assign any of its rights or obligations hereunder except as may otherwise be permitted by the Facility Documents, and (iii) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other Secured Parties and their respective successors, transferees and permitted assigns. All agreements, statements, representations and warranties made by each Pledgor herein or in any certificate or other instrument delivered by such Pledgor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Parties and shall survive the execution and delivery of this Agreement and the other Facility Documents regardless of any investigation made by the Secured Parties or on their behalf. |
| 24. | HEADINGS DESCRIPTIVE. The headings of the several Sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. |
| 25. | GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. Section 9.06 of the Loan Agreement is hereby incorporated by this reference, mutatis mutandis. |
| 26. | PLEDGOR’S DUTIES. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Pledgor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, except for the safekeeping of Collateral actually in Pledgor’s possession, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Pledgor under or with respect to any Collateral. |
| 27. | COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart hereof by facsimile or electronic transmission shall be effective as delivery of an original executed counterpart hereof. |
| 28. | SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. |
| 29. | RECOURSE. This Agreement is made with full recourse to each Pledgor and pursuant to and upon all the representations, warranties, covenants and agreements on the part of such Pledgor contained herein and in the other Facility Documents and otherwise in writing in connection herewith or therewith. |
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| 30. | ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of Company that is required to become a party to this Agreement after the date hereof pursuant to the requirements of the Loan Agreement or any other Facility Document, shall become a Pledgor hereunder by (x) executing a joinder agreement in the form of Annex G hereto and delivering same to the Collateral Agent, (y) delivering supplements to Annexes A through G, hereto as are necessary to cause such annexes to be complete and accurate with respect to such additional Pledgor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken. |
| 31. | LIMITED OBLIGATIONS. It is the desire and intent of each Pledgor and the Secured Parties that this Agreement shall be enforced against each Pledgor to the fullest extent permissible under the laws applied in each jurisdiction in which enforcement is sought. Notwithstanding anything to the contrary contained herein, in furtherance of the foregoing, it is noted that the obligations of each Pledgor constituting a Guarantor have been limited as provided in the Loan Agreement. |
| 32. | RELEASE OF PLEDGORS. If at any time any Pledgor ceases to be a Subsidiary of the Company in a transaction permitted pursuant to the Facility Documents ((other than upon the basis of such Person ceasing to be a Subsidiary as a result of a transaction with the primary intention to release such Subsidiary from its Guarantee in Article VII of the Loan Agreement)), then, such Pledgor shall be released as a Pledgor pursuant to this Agreement without any further action hereunder, and the Collateral Agent is authorized and directed, at the sole expense of the Company, to execute and deliver such instruments of release as may be reasonably requested in writing by the Company. At any time that the Company desires that a Pledgor be released from this Agreement as provided in this Section 32, the Company shall deliver to the Collateral Agent a certificate signed by an authorized officer of the Company stating that the release of such Pledgor is permitted pursuant to this Section 32. The Collateral Agent shall have no liability whatsoever to any other Secured Party as a result of the release of any Pledgor by it in accordance with, or which it believes in the absence of gross negligence and willful misconduct to be in accordance with, this Section 32. |
| 33. | RIGHTS AND OBLIGATIONS SUBJECT TO INTERCREDITOR AGREEMENT. Without limiting the generality of Section 1(b), the Liens granted hereunder in favor of the Collateral Agent for the benefit of the Secured Parties in respect of the Collateral and the exercise of any right related thereto thereby shall be subject, in each case, to the terms of the Intercreditor Agreement. |
| 34. | ANNUAL UPDATE. Each Pledgor agrees that it shall, concurrently with the delivery of annual financial statements pursuant to Section 5.01(b) of the Loan Agreement, furnish to the Collateral Agent, to the extent there are any changes to such Annexes, updated Annexes A through G hereto and be deemed to have made each representation or warranty set forth herein referencing such Annexes as of the date of delivery thereof (rather than the date of this Agreement). |
* * * *
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IN WITNESS WHEREOF, each Pledgor and the Collateral Agent have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written.
| CURO GROUP HOLDINGS CORP. | ||
| as the Borrower and a Pledgor | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
| CURO FINANCIAL TECHNOLOGIES CORP. | ||
| CURO INTERMEDIATE HOLDINGS CORP. | ||
| CURO MANAGEMENT LLC | ||
| SOUTHERNCO, INC. | ||
| FIRST HERITAGE CREDIT, LLC | ||
| FIRST HERITAGE CREDIT OF ALABAMA, LLC | ||
| FIRST HERITAGE CREDIT OF LOUISIANA, LLC | ||
| FIRST HERITAGE CREDIT OF MISSISSIPPI, LLC | ||
| FIRST HERITAGE CREDIT OF SOUTH CAROLINA, LLC | ||
| FIRST HERITAGE CREDIT OF TENNESSEE, LLC | ||
| each as a Pledgor | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
[Signature Page to Pledge Agreement]
| CURO VENTURES, LLC | ||
| ATTAIN FINANCE, LLC | ||
| AD ASTRA RECOVERY SERVICES, INC. | ||
| CURO COLLATERAL SUB, LLC | ||
| CURO CREDIT, LLC | ||
| SOUTHERN FINANCE OF SOUTH CAROLINA, INC. | ||
| SOUTHERN FINANCE OF TENNESSEE, INC. | ||
| COVINGTON CREDIT, INC. | ||
| COVINGTON CREDIT OF GEORGIA, INC. | ||
| COVINGTON CREDIT OF ALABAMA, INC. | ||
| COVINGTON CREDIT OF TEXAS, INC. | ||
| HEIGHTS FINANCE HOLDING CO. | ||
| HEIGHTS FINANCE CORPORATION, an Illinois corporation | ||
| HEIGHTS FINANCE CORPORATION, a Tennessee corporation | ||
| QUICK CREDIT CORPORATION | ||
| each as a Pledgor | ||
| By: | /s/ Gary L. Fulk | |
| Name: | Gary L. Fulk | |
| Title: | President | |
[Signature Page to Pledge Agreement]
| ENNOBLE FINANCE, LLC | ||
| as a Pledgor | ||
| By: Curo Intermediate Holdings Corp. | ||
| Its: Sole Member | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
[Signature Page to Pledge Agreement]
| Accepted and Agreed to: | ||
| ALTER DOMUS (US) LLC | ||
| as Collateral Agent, | ||
| By: | /s/ Matthew Trybula | |
| Name: | Matthew Trybula | |
| Title: | Associate Counsel | |
[Signature Page to Pledge Agreement]
Exhibit 10.5
Execution Version
SECURITY AGREEMENT
among
CURO GROUP HOLDINGS CORP.,
CERTAIN SUBSIDIARIES OF CURO GROUP HOLDINGS CORP.
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as COLLATERAL AGENT
Dated as of May 15, 2023
TABLE OF CONTENTS
Page
| Article I SECURITY INTERESTS | 2 | |
| 1.1 | Grant of Security Interests | 2 |
| 1.2 | Power of Attorney | 4 |
| Article II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS | 4 | |
| 2.1 | Necessary Filings | 4 |
| 2.2 | Rights in Collateral; No Liens | 5 |
| 2.3 | Other Financing Statements | 5 |
| 2.4 | Chief Executive Office; Principal Place of Business | 5 |
| 2.5 | Location of Inventory, Equipment and Other Collateral | 5 |
| 2.6 | Legal Names; Type of Organization (and Whether a Registered Organization); Jurisdiction of Organization; Location; Federal Employer Identification Number; Changes Thereto; etc. | 5 |
| 2.7 | Trade Names; Etc. | 6 |
| 2.8 | Certain Significant Transactions | 6 |
| 2.9 | Non-UCC Property | 6 |
| 2.10 | Real Property | 7 |
| 2.11 | Collateral in the Possession of a Bailee | 7 |
| 2.12 | As-Extracted Collateral; Timber-to-be-Cut | 7 |
| 2.13 | Recourse | 7 |
| Article III SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL | 7 | |
| 3.1 | Additional Representations and Warranties | 7 |
| 3.2 | Maintenance of Records | 8 |
| 3.3 | Direction to Account Debtors; Contracting Parties; etc. | 8 |
| 3.4 | Modification of Terms; etc. | 9 |
| 3.5 | Collection | 9 |
| 3.6 | Instruments | 9 |
| 3.7 | Assignors Remain Liable Under Accounts | 9 |
| 3.8 | Assignors Remain Liable Under Contracts | 10 |
| 3.9 | Deposit Accounts; Etc. | 10 |
| 3.10 | Letter-of-Credit Rights | 11 |
| 3.11 | Commercial Tort Claims | 11 |
| 3.12 | Chattel Paper | 12 |
| 3.13 | Further Actions | 12 |
| 3.14 | Insurance | 12 |
| Article IV SPECIAL PROVISIONS CONCERNING TRADEMARKS | 13 | |
| 4.1 | Additional Representations and Warranties | 13 |
| 4.2 | Licenses and Assignments | 13 |
| 4.3 | Infringements | 13 |
| 4.4 | Preservation of Marks | 14 |
(i)
| 4.5 | Maintenance of Registration | 14 |
| 4.6 | Future Registered Marks | 14 |
| 4.7 | Remedies | 14 |
| Article V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS | 15 | |
| 5.1 | Additional Representations and Warranties | 15 |
| 5.2 | Licenses and Assignments | 15 |
| 5.3 | Infringements | 15 |
| 5.4 | Maintenance of Patents or Copyrights | 15 |
| 5.5 | Prosecution of Patent or Copyright Applications | 15 |
| 5.6 | Other Patents and Copyrights | 16 |
| 5.7 | Remedies | 16 |
| Article VI PROVISIONS CONCERNING ALL COLLATERAL | 16 | |
| 6.1 | Protection of Collateral Agent’s Security | 16 |
| 6.2 | Warehouse Receipts Non-Negotiable | 16 |
| 6.3 | Additional Information | 17 |
| 6.4 | Further Actions | 17 |
| 6.5 | Financing Statements | 17 |
| Article VII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT | 18 | |
| 7.1 | Remedies; Obtaining the Collateral Upon Default | 18 |
| 7.2 | Remedies; Disposition of the Collateral | 19 |
| 7.3 | Waiver of Claims | 20 |
| 7.4 | Application of Proceeds | 21 |
| 7.5 | Remedies Cumulative | 21 |
| 7.6 | Discontinuance of Proceedings | 21 |
| Article VIII INDEMNITY | 22 | |
| 8.1 | Indemnity | 22 |
| 8.2 | Indemnity Obligations Secured by Collateral; Survival | 22 |
| Article IX DEFINITIONS | 22 | |
| Article X MISCELLANEOUS | 27 | |
| 10.1 | Notices | 27 |
| 10.2 | Waiver; Amendment | 27 |
| 10.3 | Obligations Absolute | 28 |
| 10.4 | Successors and Assigns | 28 |
| 10.5 | Headings Descriptive | 28 |
| 10.6 | GOVERNING LAW; WAIVER OF JURY TRIAL | 28 |
| 10.7 | Assignor’s Duties | 28 |
| 10.8 | Termination; Release | 28 |
| 10.9 | Counterparts | 29 |
| 10.10 | Severability | 29 |
| 10.11 | The Collateral Agent and the other Secured Parties | 29 |
| 10.12 | Additional Assignors | 30 |
| 10.13 | Intercreditor Agreement | 30 |
(ii)
| ANNEX A | Schedule of Chief Executive Offices Address(es); Principal Place of Business |
| ANNEX B | Schedule of Inventory and Equipment Locations |
| ANNEX C | Schedule of Legal Names, Type of Organization (and Whether a Registered Organization), Jurisdiction of Organization, Location and Federal Employer Identification Numbers |
| ANNEX D | Schedule of Trade and Fictitious Names |
| ANNEX E | Description of Certain Significant Transactions Occurring Within Five Year Prior to the Date of the Security Agreement |
| ANNEX F | Schedule of Deposit Accounts and Securities Accounts |
| ANNEX G | Specified Excluded Accounts |
| ANNEX H | Schedule of Commercial Tort Claims |
| ANNEX I | Schedule of Marks and Applications |
| ANNEX J | Schedule of Patents |
| ANNEX K | Schedule of Copyrights |
| ANNEX L | Trademark Security Agreement |
| ANNEX M | Grant of Security Interest in United States Patents |
| ANNEX N | Grant of Security Interest in United States Copyrights |
| ANNEX O | Form of Security Agreement Joinder |
| ANNEX P | Letter-of-Credit Rights |
| ANNEX Q | Chattel Paper and Instruments |
| ANNEX R | Real Property |
| ANNEX S | Schedule of Insurance |
(iii)
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of May 15, 2023, is made by each of the undersigned assignors (each, an “Assignor” and, together with any other entity that becomes an assignor hereunder pursuant to Section 10.12 hereof, the “Assignors”) in favor of U.S. Bank Trust Company, National Association, as collateral agent (together with any successor collateral agent or assign and any co-collateral agents, in such capacity, the “Collateral Agent”), for the benefit of the Notes Secured Parties. Certain capitalized terms as used herein are defined in Article IX hereof. Except as otherwise defined herein, all capitalized terms used herein and defined in the Indenture (as defined below) shall be used herein as therein defined.
W I T N E S S E T H:
WHEREAS, CURO Group Holdings Corp., a Delaware corporation (the “Company”), the guarantors from time to time party thereto (the “Guarantors”), and the Collateral Agent and Trustee, have entered into an Indenture, dated as of May 15, 2023 (as amended, modified, restated and/or supplemented from time to time, the “Indenture”) for the benefit of each other and for the equal and ratable benefit of the Holders of the 7.500% Senior 1.5 Lien Secured Notes due 2028;
WHEREAS, pursuant to the Indenture, each Guarantor has jointly and severally guaranteed to the Notes Secured Parties the payment when due of all Indenture Obligations as described (and defined) therein;
WHEREAS, in order to induce (i) each Holder to hold the Notes and (ii) the Collateral Agent to act as trustee and as collateral agent, the Assignors have agreed to grant to the Collateral Agent a continuing security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, their respective Secured Obligations (as defined herein);
WHEREAS, the (i) First Priority Intercreditor Agreement governs the relative rights and priorities of the Notes Secured Parties and the First Lien Creditors (as defined therein) and (ii) Junior Intercreditor Agreement governs the relative rights and priorities of the Notes Secured Parties and the Second Lien Creditors (as defined therein) (clauses (i) and (ii) being collectively referred to as the “Intercreditor Agreement”), in each case, in respect of all of the Collateral; and
WHEREAS, the Assignors will obtain benefits from the issuance of the Notes under the Indenture and, accordingly, the Assignors desire to grant a security interest in the Collateral to the Collateral Agent for its benefit and for the benefit of the Notes Secured Parties under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Notes Secured Parties and hereby covenants and agrees with the Collateral Agent for the benefit of the Notes Secured Parties as follows:
Article I
SECURITY INTERESTS
1.1 Grant of Security Interests. (a) As security for the prompt and complete payment and performance when due of all of its Secured Obligations, each Assignor does hereby assign and pledge to the Collateral Agent, and does hereby grant to the Collateral Agent, for the benefit of the Notes Secured Parties, a continuing security interest in and a continuing lien on all of the right, title and interest of such Assignor in, to and under all of the following assets, property and fixtures (and all rights therein) of such Assignor, or in which or to which such Assignor has any rights, in each case whether now existing or hereafter from time to time acquired, wherever located:
(i) each and every Account;
(ii) all cash and Cash Equivalents;
(iii) the Cash Collateral Account and all monies, securities, Instruments and other investments deposited or required to be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all Software, Domain Names, Trade Secrets, Intellectual Property Rights and all other intellectual property owned by an Assignor, including, without limitation, industrial designs and mask works; together with all causes of action arising prior to or after the date hereof for infringement or other violation of any of the forgoing;
(vii) all Contracts, together with all Contract Rights arising thereunder;
(viii) all Copyrights, together with all causes of action arising prior to or after the date hereof for infringement or other violation of any of such Copyrights;
(ix) (A) all Deposit Accounts and all other demand, deposit, time, savings, cash management, passbook and similar accounts, (B) all Securities Accounts and (C) all Commodity Accounts, in each case maintained by such Assignor with any Person and all monies, securities, Instruments, other investments or other property or assets deposited or required to be deposited in any of the foregoing;
(x) all Documents;
(xi) all Equipment;
(xii) all Fixtures;
(xiii) all General Intangibles;
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(xiv) all Goods;
(xv) all Instruments;
(xvi) all Inventory;
(xvii) all Investment Property;
(xviii) all Letters of Credit and Letter-of-Credit Rights (whether or not the respective letter of credit is evidenced by a writing);
(xix) all Marks, together with the registrations and right to all renewals thereof, the goodwill of the business of such Assignor symbolized by the Marks and all causes of action arising prior to or after the date hereof for infringement or other violation of any of the Marks;
(xx) all Patents, together with all causes of action arising prior to or after the date hereof for infringement or other violations of any of the Patents;
(xxi) all Permits;
(xxii) all Software and all Software licensing rights, including, as applicable, all writings, plans, specifications and schematics, engineering drawings, customer lists and other computer materials and records;
(xxiii) all books and records of any kind pertaining to any of the foregoing;
(xxiv) all Supporting Obligations;
(xxv) all other tangible and intangible personal property of whatever nature whether or not covered by Article 9 of the UCC; and
(xxvi) all Proceeds and products of any and all of the foregoing, all collateral security and guarantees given by any person with respect to any of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, and any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to such Assignors from time to time with respect to any of the foregoing
(all of the above, the “Collateral”).
(b) The security interest of the Collateral Agent under this Agreement extends to all Collateral which any Assignor may acquire, or with respect to which any Assignor may obtain rights, at any time during the term of this Agreement. Notwithstanding anything to the contrary contained herein, the term “Collateral” shall not include, and the security interest granted under this Agreement shall not attach to any Excluded Asset; provided that immediately upon the ineffectiveness, lapse or termination of any restriction or condition covering, or resulting in, any asset or other property of an Assignor constituting Excluded Assets, the Collateral shall (in the absence of any other applicable limitation) include, and such Assignor shall be deemed to have granted a security interest in, such Assignor’s right, title and interest in and to such asset or other property and such asset or other property shall no longer constitute Excluded Assets.
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Notwithstanding anything herein to the contrary, the lien and security interest granted pursuant to this Agreement and the exercise of any right or remedy hereunder are subject to the provisions of the Intercreditor Agreement at any time the Intercreditor Agreement is in effect. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control at any time the Intercreditor Agreement is in effect. In the event of any conflict or inconsistency between the provisions of the Indenture and this Agreement relating to the duties of the Collateral Agent the provisions of the Indenture shall govern and control.
1.2 Power of Attorney. Each Assignor hereby constitutes and appoints the Collateral Agent its true and lawful attorney, irrevocably, with full power exercisable solely after the occurrence of and during the continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require, demand, receive, compound, recover, compromise and give acquittance for any and all moneys and claims for moneys due or to become due to such Assignor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which is or may be reasonably necessary to protect the interests of the Notes Secured Parties, which appointment as attorney is coupled with an interest. The Collateral Agent and the other Notes Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Assignor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final and non-appealable judgment.
Article II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows:
2.1 Necessary Filings. Subject to Section 5.27 of the Indenture, all filings, registrations, recordings and other actions necessary or appropriate to create, preserve and perfect the security interest granted by such Assignor to the Collateral Agent hereby in respect of the Collateral have been (or, within 60 days after the date hereof (as such date may be extended in accordance with Section 3.9 hereof), in the case of Deposit Accounts, Securities Accounts and Commodity Accounts, will be) accomplished and the security interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral creates a valid and, together with all such filings, registrations, recordings and other actions, a perfected security interest therein prior to the rights of all other Persons therein and subject to no other Liens (other than Permitted Liens) and is entitled to all the rights, priorities and benefits afforded by the Uniform Commercial Code or other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each case to the extent that the Collateral consists of the type of property in which a security interest may be perfected by possession or control (within the meaning of the UCC as in effect on the date hereof in the State of New York), by filing a financing statement under the Uniform Commercial Code as enacted in any relevant jurisdiction or by a filing of a Grant of Security Interest in the respective form attached hereto in the United States Patent and Trademark Office or in the United States Copyright Office.
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2.2 Rights in Collateral; No Liens. Such Assignor has the full power, authority and legal right to pledge all of the Collateral pledged by such Assignor pursuant to this Agreement and such Assignor is, and as to all Collateral acquired by it from time to time after the date hereof such Assignor will be, the owner of, or has rights in, all Collateral free from any Lien or other right, title or interest of any Person (other than Permitted Liens), and such Assignor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Collateral Agent.
2.3 Other Financing Statements. As of the date hereof, there is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) on file or of record in any relevant jurisdiction covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Permitted Liens), and so long as the Termination Date has not occurred, such Assignor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by such Assignor or in connection with Permitted Liens.
2.4 Chief Executive Office; Principal Place of Business. The chief executive office and principal place of business of such Assignor is, on the date of this Agreement, located at the address indicated on Annex A hereto for such Assignor. During the period of the four calendar months preceding the date of this Agreement, neither the chief executive office nor the principal place of business of such Assignor has been located at any address other than that indicated on Annex A in accordance with the immediately preceding sentence, in each case unless each such other address is also indicated on Annex A hereto for such Assignor.
2.5 Location of Inventory, Equipment and Other Collateral. All Inventory and Equipment held on the date hereof by each Assignor is located at one of the locations shown on Annex B hereto for such Assignor. Each other location where any Assignor maintains any books or records, owns any assets, stores any Collateral or otherwise conducts any business as of the date hereof is also set forth on Annex B.
2.6 Legal Names; Type of Organization (and Whether a Registered Organization); Jurisdiction of Organization; Location; Federal Employer Identification Number; Changes Thereto; etc.. As of the date hereof, the exact legal name of each Assignor, the type of organization of such Assignor, whether or not such Assignor is a Registered Organization, the jurisdiction of organization of such Assignor, the Location of such Assignor and the federal employer identification number of such Assignor (if any), is listed on Annex C hereto for such Assignor. Such Assignor shall not change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its jurisdiction of organization, its Location or its federal employer identification number (if any) from that listed on Annex C hereto, except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Indenture Documents and so long as same do not involve (x) a Registered Organization ceasing to constitute the same or (y) such Assignor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 5 Business Days’ prior written notice (or such shorter period as may be acceptable to the Collateral Agent in its sole discretion) of each change to the information listed on Annex C (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex C which shall correct all information contained therein for such Assignor, and (ii) in connection with each change or changes, it shall have taken all action reasonably necessary to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, such Assignor shall take all actions reasonably necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.
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2.7 Trade Names; Etc.. Such Assignor has or operates in any jurisdiction under, or in the preceding five years has had or has operated in any jurisdiction under, no legal names, trade names, fictitious names or other names except its legal name as specified in Annex C and such other trade or fictitious names as are listed on Annex D hereto for such Assignor. Such Assignor shall not assume or operate in any jurisdiction under any new trade, fictitious or other name that would make any financing statement, or continuation statement filed in connection therewith, seriously misleading within the meaning of Sections 9-506 or 9-507 (or analogous provision) of the UCC until (i) it shall have given to the Collateral Agent not less than 5 Business Days’ written notice (or such shorter period as may be acceptable to the Collateral Agent in its sole discretion) of its intention to do so, clearly describing such new name and the jurisdictions in which such new name will be used and providing such other information in connection therewith as the Collateral Agent may reasonably request and (ii) with respect to such new name, it shall have taken all actions reasonably necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect.
2.8 Certain Significant Transactions. During the five year period preceding the date of this Agreement, no Person has merged, amalgamated or consolidated with or into any Assignor, and no Person has liquidated into, or transferred all or substantially all of its assets to, any Assignor, in each case except as described in Annex E hereto.
2.9 Non-UCC Property. The aggregate Fair Market Value of all property of the Assignors of the types described in clauses (1), (2) and (3) of Section 9-311(a) of the UCC and constituting Collateral (other than any Excluded Asset) does not exceed $1,000,000. If the aggregate Fair Market Value of all such property at any time owned by all Assignors and constituting Collateral (other than any Excluded Asset) exceeds $1,000,000, the Assignors shall provide prompt written notice thereof to the Collateral Agent and the Assignors shall promptly (and in any event within 30 days after acquiring knowledge thereof, unless the Collateral Agent shall extend such period in its sole discretion) take such actions (at their own cost and expense) as may be required under the respective United States, State or other laws referenced in Section 9-311(a) of the UCC to perfect the security interests granted herein in any Collateral (other than any Excluded Asset) where the filing of a financing statement does not perfect the security interest in such property in accordance with the provisions of Section 9-311(a) of the UCC.
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2.10 Real Property. As of the date hereof, Annex R contains a true, accurate and complete list of each real property owned by each of the Assignors in fee simple that has a Fair Market Value in excess of $2,500,000.
2.11 Collateral in the Possession of a Bailee. If any Inventory or other Goods are at any time in the possession of a bailee (other than with respect to Inventory, Equipment or Goods, in each case in transit or out for repair or servicing in the ordinary course of business), such Assignor shall promptly notify the Collateral Agent thereof and, if requested by the Collateral Agent, shall use its commercially reasonable efforts to promptly obtain an acknowledgment from such bailee, in form and substance reasonably satisfactory to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions of the Collateral Agent, without the further consent of such Assignor. The Collateral Agent agrees with such Assignor that the Collateral Agent shall not give any such instructions unless an Event of Default has occurred and is continuing or would occur after taking into account any action by the respective Assignor with respect to any such bailee.
2.12 As-Extracted Collateral; Timber-to-be-Cut. On the date hereof, such Assignor does not own, or expect to acquire, any property which constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut. If at any time after the date of this Agreement such Assignor owns, acquires or obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such Assignor shall furnish the Collateral Agent with prompt written notice thereof (which notice shall describe in reasonable detail the As-Extracted Collateral and/or Timber-to-be-Cut and the locations thereof) and shall take all actions reasonably necessary to perfect the security interest of the Collateral Agent therein.
2.13 Recourse. This Agreement is made with full recourse to each Assignor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Assignor contained herein, in the Indenture Documents and otherwise in writing in connection herewith or therewith.
Article III
SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT
RIGHTS;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
3.1 Additional Representations and Warranties. As of the time when each of its Accounts arises, each Assignor shall be deemed to have represented and warranted that each such Account, and all of Assignor’s records, papers and documents relating thereto (if any) are genuine and what they purport to be, and that all papers and documents (if any) relating thereto (i) will, to the knowledge of such Assignor, represent the genuine, legal, valid and binding obligation of the account debtor evidencing indebtedness unpaid and owed by the respective account debtor arising out of the performance of labor or services or the sale, lease, assignment or other disposition and delivery of the property listed therein, or both, (ii) will be the only original writings evidencing and embodying such obligation of the account debtor named therein (other than copies created for general accounting purposes), (iii) will, to the knowledge of such Assignor, evidence true and valid obligations, enforceable in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally or by equitable principles of general applicability and (iv) will be in compliance and will conform in all material respects with all applicable federal, state and local laws and applicable laws of any relevant foreign jurisdiction.
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3.2 Maintenance of Records. Each Assignor will keep and maintain, at its own cost and expense, complete, accurate and proper books and records, in all material respects, of the Collateral, including, but not limited to, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith, and such Assignor will make the same available on such Assignor’s premises to the Collateral Agent for inspection, at such Assignor’s own cost and expense, at any and all reasonable times, but not more than two (2) such inspections per calendar year (except upon the occurrence and during the continuance of an Event of Default), upon prior notice to such Assignor. Upon the occurrence and during the continuance of an Event of Default and at the request of the Collateral Agent, such Assignor shall, at its own cost and expense, deliver all tangible evidence of its Accounts and Contract Rights (including, without limitation, all documents evidencing the Accounts and all Contracts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Assignor), as well as such reports relating thereto as the Collateral Agent may reasonably request. Upon the occurrence and during the continuance of an Event of Default and if the Collateral Agent so directs, such Assignor shall legend, in form and manner reasonably satisfactory to the Collateral Agent, the Accounts and the Contracts, as well as books, records and documents (if any) of such Assignor evidencing or pertaining to such Accounts and Contracts with an appropriate reference to the fact that such Accounts and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein.
3.3 Direction to Account Debtors; Contracting Parties; etc.. Upon the occurrence and during the continuance of an Event of Default, if the Collateral Agent so directs any Assignor, such Assignor agrees (x) to instruct all obligors with respect to the Accounts and Contracts to make all payments on account of the Accounts and Contracts to be made directly to the Cash Collateral Account, (y) that the Collateral Agent may, but has no obligation to, directly notify the obligors with respect to any Accounts and/or under any Contracts to make payments with respect thereto as provided in the preceding clause (x), and (z) that the Collateral Agent may enforce collection of any such Accounts and Contracts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as such Assignor. Without notice to or assent by any Assignor, the Collateral Agent may, upon the occurrence and during the continuance of an Event of Default, apply any or all amounts then in, or thereafter deposited in, the Cash Collateral Account toward the payment of the Secured Obligations in the manner provided in Section 7.4 of this Agreement. Any costs and expenses of collection (including attorneys’ fees) incurred by an Assignor shall be borne solely by such Assignor. Any reasonable and documented costs and expenses of collection (including reasonable and documented out-of-pocket attorneys’ fees) incurred by the Collateral Agent shall be borne solely by the relevant Assignor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the relevant Assignor, provided that (x) the failure by the Collateral Agent to so notify such Assignor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 3.3 and (y) no such notice shall be required if an Event of Default of the type described in Section 7.01(i) or (j) of the Indenture has occurred and is continuing.
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3.4 Modification of Terms; etc.. Except in accordance with such Assignor’s ordinary course of business or as is consistent with reasonable business judgment or as permitted by Section 3.5 hereof, no Assignor shall rescind or cancel any indebtedness evidenced by any Account or under any Contract, or modify any material term thereof or make any material adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Account or Contract, or interest therein. No Assignor will do anything to impair the rights of the Collateral Agent in the Accounts or Contracts.
3.5 Collection. Each Assignor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Accounts or obligor under any Contract, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Account or Contract, and apply promptly upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account or under such Contract. Except as otherwise directed by the Collateral Agent after the occurrence and during the continuation of an Event of Default, any Assignor may allow in the ordinary course of business as adjustments to amounts owing under its Accounts and Contracts (i) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Assignor finds appropriate in accordance with reasonable business judgment and (ii) a refund or credit due as a result of returned or damaged merchandise or improperly performed services or for other reasons which such Assignor finds appropriate in accordance with reasonable business judgment. Any costs and expenses of collection (including attorneys’ fees) incurred by an Assignor shall be borne solely by such Assignor. Any reasonable and documented costs and expenses (including, without limitation, reasonable and documented out-of-pocket attorneys’ fees) of collection incurred by the Collateral Agent shall be borne solely by the relevant Assignor.
Instruments. No Assignor owns, as of the date hereof, any Instrument (other than (x) checks and other payment instruments received and collected in the ordinary course of business and (y) any Instrument subject to pledge pursuant to the Pledge Agreement) with a stated amount or Fair Market Value in excess of $250,000 except as set forth on Annex Q. If any Assignor owns or acquires any Instrument in excess of $250,000 constituting Collateral (other than (x) checks and other payment instruments received and collected in the ordinary course of business and (y) any Instrument subject to pledge pursuant to the Pledge Agreement), such Assignor will within 30 days thereafter (or such longer period as may be acceptable to the Collateral Agent in its sole discretion) notify the Collateral Agent thereof in writing, and upon request by the Collateral Agent will promptly deliver such Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent.
3.6 Assignors Remain Liable Under Accounts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Accounts to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to such Accounts. Neither the Collateral Agent nor any other Notes Secured Party shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Notes Secured Party of any payment relating to such Account pursuant hereto, nor shall the Collateral Agent or any other Notes Secured Party be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.
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3.7 Assignors Remain Liable Under Contracts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Contracts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with and pursuant to the terms and provisions of each Contract. Neither the Collateral Agent nor any other Notes Secured Party shall have any obligation or liability under any Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Notes Secured Party of any payment relating to such Contract pursuant hereto, nor shall the Collateral Agent or any other Notes Secured Party be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any performance by any party under any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.
3.8 Deposit Accounts; Etc.. (a) No Assignor maintains, or at any time after the date of this Agreement shall establish or maintain, any Deposit Account, Securities Account or Commodity Account, except for such accounts maintained with a bank (as defined in Section 9-102 of the UCC) whose jurisdiction (determined in accordance with Section 9-304 of the UCC) is within a State of the United States. Annex F hereto accurately sets forth, as of the date of this Agreement, for each Assignor, each Deposit Account, Securities Account and Commodity Account maintained by such Assignor (including a description thereof and the respective account number), the name of the respective bank with which such Deposit Account, Securities Account or Commodity Account is maintained, and the jurisdiction of the respective bank with respect to such Deposit Account, Securities Account or Commodity Account. For each Deposit Account, Securities Account or Commodity Account (other than any Excluded Account), the respective Assignor shall cause the bank with which such Deposit Account, Securities Account or Commodity Account is maintained to execute and deliver to the Collateral Agent, within 60 days after the date of this Agreement (as such date may be extended by the Collateral Agent acting on the instructions of the requisite holders of the Notes) or, if later, at the time of the establishment of the respective Deposit Account, Securities Account or Commodity Account, a “control agreement” in form and substance reasonably satisfactory to the Collateral Agent. If any bank with which a Deposit Account, Securities Account or Commodity Account (other than an Excluded Account) is maintained refuses to, or does not, enter into such a “control agreement”, then the respective Assignor shall promptly (and in any event within 60 days after the date of this Agreement (as such date may be extended by the Collateral Agent acting on the instructions of the requisite holders of the Notes) or, if later, the time of establishment of such account), close the respective Deposit Account, Securities Account or Commodity Account and transfer all balances therein to the Cash Collateral Account or Deposit Account, Securities Account or Commodity Account meeting the requirements of this Section 3.9. If any bank with which a Deposit Account, Securities Account or Commodity Account (other than an Excluded Account) is maintained refuses to subordinate its claims with respect to such Deposit Account, Securities Account or Commodity Account to the Collateral Agent’s security interest therein on terms reasonably satisfactory to the Collateral Agent, then the Collateral Agent may (x) require that the respective Assignor terminate such Deposit Account, Securities Account or Commodity Account and transfer all balances therein to the Cash Collateral Account or another Deposit Account, Securities Account or Commodity Account in accordance with the immediately preceding sentence or (y) agree to a “control agreement” without such subordination.
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(b) After the date of this Agreement, no Assignor shall establish any new Deposit Account, Securities Account or Commodity Account, except for (x) Deposit Accounts, Securities Accounts or Commodity Accounts that are established and maintained with banks and meeting the requirements of Section 3.9(a) and (y) Excluded Accounts. At the time any such Deposit Account, Securities Account or Commodity Account (other than an Excluded Account) is established, the appropriate “control agreement” shall be entered into in accordance with the requirements of preceding clause (a) and the respective Assignor shall, upon request by the Collateral Agent, furnish to the Collateral Agent a supplement to Annex F hereto containing the relevant information with respect to the respective Deposit Account, Securities Account or Commodity Account and the bank with which same is established.
(c) Notwithstanding anything to the contrary herein, no Assignor shall be required to take any action to cause the Collateral Agent to obtain control (“Control”) in accordance with Section 9-104 or 9-106(c), as the case may be, of the UCC with respect to any Excluded Account; provided, that if such Assignor shall cause the Collateral Agent to have Control over any such Deposit Account, Securities Account or Commodity Account, such Assignor will ensure that the security interest granted by it in favor of the Collateral Agent hereunder to secure the Secured Obligations is also perfected by Control as contemplated by Section 4.7 of the Intercreditor Agreement.
3.9 Letter-of-Credit Rights. As of the date hereof, no Assignor is a beneficiary under a Letter of Credit with a stated amount of $250,000 or more or Letters of Credit in an aggregate stated amount of $1,000,000 or more, except as set forth on Annex P. If any Assignor is at any time a beneficiary under a Letter of Credit with a stated amount of $250,000 or more or an aggregate stated amount of $1,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof and such Assignor shall, pursuant to an agreement, use its commercially reasonable efforts to either (i) arrange for the issuer and any confirmer of such Letter of Credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under such Letter of Credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of such Letter of Credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the Letter of Credit are to be applied as provided in this Agreement after the occurrence and during the continuance of an Event of Default.
3.10 Commercial Tort Claims. All Commercial Tort Claims of each Assignor asserted in a judicial proceeding in existence on the date of this Agreement are described in Annex H hereto. If any Assignor shall at any time after the date of this Agreement acquire a Commercial Tort Claim asserted in a judicial proceeding in an amount (taking the greater of the aggregate claimed damages thereunder or the reasonably estimated value thereof) of $250,000 or more, such Assignor shall promptly notify the Collateral Agent thereof in a writing signed by such Assignor and describing the details thereof and shall grant to the Collateral Agent in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement.
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3.11 Chattel Paper. As of the date hereof, Annex Q is a true and correct list of all Chattel Paper (including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper) held by each Assignor, having a value or face amount of $250,000 or more or an aggregate value or face amount in excess of $1,000,000. Upon the reasonable request of the Collateral Agent made at any time or from time to time, each Assignor shall promptly furnish to the Collateral Agent a list of all Electronic Chattel Paper held or owned by such Assignor. Furthermore, each Assignor shall promptly take all actions which are reasonably practicable so that the Collateral Agent has “control” of all Electronic Chattel Paper with a value or face amount of $500,000 or more or an aggregate value or face amount in excess of $1,000,000 in accordance with the requirements of Section 9-105 of the UCC. Each Assignor will promptly (and in any event within 30 days (or such longer period as may be acceptable to the Collateral Agent acting on the instructions of the requisite holders of the Notes)) following any reasonable request by the Collateral Agent, deliver all of its Tangible Chattel Paper to the Collateral Agent.
3.12 Further Actions. Each Assignor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps, including any and all actions as may be reasonably necessary or required under the Federal Assignment of Claims Act, relating to its Accounts, Contracts, Instruments and other property or rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require, to the extent otherwise required herein, and not otherwise inconsistent with the provisions of Section 1.1(b).
3.13 Insurance. As of the date hereof, Annex S is a true and correct description of all insurance policies of the Assignors (which Annex S sets forth, with respect to each policy, the Assignors covered, the amount of coverage, the date of expiry, the type of coverage and the insurance provider). Subject to the terms of the Intercreditor Agreement, each Assignor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Assignor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of such Assignor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that any Assignor at any time or times shall fail to obtain or maintain any of the policies of insurance required by the Collateral Documents or any Indenture Document or to pay any premium in whole or part relating thereto, the Collateral Agent may, without waiving or releasing any obligation or liability of the Assignors hereunder or any Event of Default, in its sole discretion, subject to the terms of the Intercreditor Agreement, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Collateral Agent reasonably deems advisable. All sums disbursed by the Collateral Agent in connection with this Section 3.14, including documented attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Assignors to the Collateral Agent and shall be additional Secured Obligations secured hereby.
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Article IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1 Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use the registered Marks listed in Annex I hereto for such Assignor and that said listed Marks include all United States trademarks, service marks, trade dress or trade names, registrations and applications for United States marks registered in the United States Patent and Trademark Office as of the date hereof. Each Assignor represents and warrants that it owns, is licensed to use or otherwise has the right to use, all material trademarks, service marks, trade dress or trade names and all Internet domain names and associated URL addresses that it uses. Each Assignor further warrants that it has no knowledge of any third party claim received by it that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any trademark, service mark or trade name of any other Person other than as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use all U.S. trademark registrations and applications listed in Annex I hereto and that said registrations are valid, subsisting, have not been canceled and that such Assignor is not aware of any third-party claim that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said applications will not mature into registrations, other than as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of an Event of Default, any document which may be required by the United States Patent and Trademark Office or applicable Domain Name registrar in order to effect an absolute assignment of all right, title and interest in each Mark and/or Domain Name, and record the same.
4.2 Licenses and Assignments. Except as otherwise permitted by the Indenture Documents, each Assignor hereby agrees not to divest itself of any right under any Mark.
4.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to notify the Collateral Agent in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any party who such Assignor believes is, or may be, infringing or diluting or otherwise violating any of such Assignor’s rights in and to any Mark in any manner that could reasonably be expected to have a Material Adverse Effect, or with respect to any party claiming that such Assignor’s use of any Mark material to such Assignor’s business violates in any material respect any property right of that party. Each Assignor further agrees to prosecute diligently in accordance with reasonable business practices any Person infringing any Mark or any trademarks, service marks, trade dress and trade names exclusively licensed by such Assignor in any manner that could reasonably be expected to have a Material Adverse Effect.
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4.4 Preservation of Marks. Each Assignor agrees to use the Marks owned or any trademarks, service marks, trade dress and trade names exclusively licensed by such Assignor which are material to such Assignor’s business in interstate commerce during the time in which this Agreement is in effect and to take all such other actions as are reasonably necessary to preserve such Marks as trademarks or service marks under the laws of the United States (other than any such Marks which are no longer used or useful in its business or operations).
4.5 Maintenance of Registration. Each Assignor shall, at its own expense, diligently process all documents reasonably required to maintain all Mark registrations and/or Domain Names owned by such Assignor, including but not limited to affidavits of use and applications for renewals of registration in the United States Patent and Trademark Office for all of its material registered Marks, and shall pay all fees and disbursements in connection therewith and shall not abandon any such filing of affidavit of use or any such application of renewal prior to the exhaustion of all administrative and judicial remedies (other than with respect to registrations and applications deemed by such Assignor in its reasonable business judgment to be no longer prudent to pursue).
4.6 Future Registered Marks. If any Mark registration is issued hereafter to any Assignor as a result of any application now or hereafter pending before the United States Patent and Trademark Office, any Assignor hereafter applies for any Mark with the United States Patent and Trademark Office or any Assignor acquires any United States Mark registration or application, within 30 days after such occurrence (or such longer period as may be acceptable to the Collateral Agent acting on the instructions of the requisite holders of the Notes), such Assignor shall deliver to the Collateral Agent a copy of such registration certificate or similar indicia of ownership, and a grant of a security interest in such Mark registration or Mark application, to the Collateral Agent and at the expense of such Assignor, confirming the grant of a security interest in such Mark registration or Mark application to the Collateral Agent hereunder, the form of such security to be substantially in the form of Annex L hereto or in such other form as may be reasonably satisfactory to the Collateral Agent.
4.7 Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title and interest of such Assignor in and to each of the Marks and Domain Names, together with all trademark rights and rights of protection to the same, vested in the Collateral Agent for the benefit of the Notes Secured Parties, in which event such rights, title and interest shall immediately vest, in the Collateral Agent for the benefit of the Notes Secured Parties, and the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged and notarized and record said absolute assignment with the applicable agency or registrar; (ii) take and use or sell the Marks or Domain Names and the goodwill of such Assignor’s business symbolized by the Marks or Domain Names and the right to carry on the business and use the assets of such Assignor in connection with which the Marks or Domain Names have been used; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from using the Marks or Domain Names in any manner whatsoever, directly or indirectly, and such Assignor shall execute such further documents that the Collateral Agent may reasonably request to further confirm this and to transfer ownership of the Marks or Domain Names and registrations and any pending trademark applications in the United States Patent and Trademark Office or applicable Domain Name registrar to the Collateral Agent.
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Article V
SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1 Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of all rights in (i) all Trade Secrets, (ii) the Patents listed in Annex J hereto for such Assignor and that said Patents include all the United States patents and applications for United States patents that such Assignor owns as of the date hereof and (iii) the Copyrights listed in Annex K hereto for such Assignor and that said Copyrights include all the United States copyrights registered with the United States Copyright Office and applications to United States copyrights that such Assignor owns as of the date hereof. Each Assignor further warrants that it has no knowledge of any third party claim that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any patent of any other Person or such Assignor has misappropriated any Trade Secret or proprietary information which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Event of Default, any document which may be required by the United States Patent and Trademark Office or the United States Copyright Office in order to effect an absolute assignment of all right, title and interest in each Patent or Copyright, and to record the same.
5.2 Licenses and Assignments. Except as otherwise permitted by the Indenture Documents, each Assignor hereby agrees not to divest itself of any right under any Patent or Copyright.
5.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to furnish the Collateral Agent in writing with all pertinent information available to such Assignor with respect to any infringement, contributing infringement or active inducement to infringe or other violation of such Assignor’s rights in any Patent or Copyright or to any claim that the practice of any Patent or use of any Copyright violates any property right of a third party, or with respect to any misappropriation of any Trade Secret or any claim that practice of any Trade Secret Right violates any property right of a third party, in each case, in any manner which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor further agrees, to diligently prosecute, in accordance with its reasonable business judgment, any Person infringing any Patent or Copyright owned or any patent or copyright exclusively licensed by such Assignor or any Person misappropriating any Trade Secret, in each case to the extent that such infringement or misappropriation, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
5.4 Maintenance of Patents or Copyrights. At its own expense, each Assignor shall make timely payment of all post-issuance fees required to maintain in force its rights under each Patent or Copyright owned by such Assignor (other than any such Patents or Copyrights which are no longer used or are deemed by such Assignor in its reasonable business judgment to no longer be useful in its business or operations).
5.5 Prosecution of Patent or Copyright Applications. At its own expense, each Assignor shall diligently prosecute all material applications owned by such Assignor for (i) United States Patents listed in Annex J hereto and (ii) Copyrights listed on Annex K hereto, in each case for such Assignor and shall not abandon any such application prior to exhaustion of all administrative and judicial remedies (other than applications that are deemed by such Assignor in its reasonable business judgment to no longer be necessary in the conduct of the Assignor’s business).
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5.6 Other Patents and Copyrights. Within 30 days after the acquisition or issuance of a United States Patent, registration of a Copyright, or acquisition of a registered Copyright, or of filing of an application for a United States Patent or Copyright, the relevant Assignor shall deliver to the Collateral Agent a copy of said Copyright or Patent, or certificate or registration of, or application therefor, as the case may be, with a grant of a security interest as to such Patent or Copyright, as the case may be, to the Collateral Agent and at the sole expense of such Assignor, confirming the grant of a security interest, the form of such grant of a security interest to be substantially in the form of Annex M or N hereto, as appropriate.
5.7 Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title, and interest of such Assignor in each of the Patents and Copyrights vested in the Collateral Agent for the benefit of the Notes Secured Parties, in which event such right, title, and interest shall immediately vest in the Collateral Agent for the benefit of the Notes Secured Parties, in which case the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 5.1 hereof to execute, cause to be acknowledged and notarized and to record said absolute assignment with the applicable agency; (ii) take and practice or sell the Patents and Copyrights; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and such Assignor shall execute such further documents as the Collateral Agent may reasonably request further to confirm this and, to the extent permitted by applicable law, to transfer ownership of the Patents and Copyrights to the Collateral Agent for the benefit of the Notes Secured Parties.
Article VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1 Protection of Collateral Agent’s Security. Except as otherwise permitted by the Indenture Documents, each Assignor will do nothing to impair the rights of the Collateral Agent in the Collateral. Each Assignor will at all times maintain insurance, at such Assignor’s own expense to the extent and in the manner provided in the Indenture Documents. Except to the extent otherwise permitted to be retained by such Assignor or applied by such Assignor pursuant to the terms of the Indenture Documents, the Collateral Agent shall, at the time any proceeds of such insurance are distributed to the Notes Secured Parties, apply such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Assignor to pay the Secured Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Assignor.
6.2 Warehouse Receipts Non-Negotiable. To the extent practicable, each Assignor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its Inventory, such Assignor shall request that such warehouse receipt or receipt in the nature thereof shall not be “negotiable” (as such term is used in Section 7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction or under other relevant law).
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6.3 Additional Information. Each Assignor will, at its own expense, from time to time upon the reasonable request of the Collateral Agent, promptly (and in any event within 10 Business Days after its receipt of the respective request (or such longer period as may be acceptable to the Collateral Agent in its sole discretion)) furnish to the Collateral Agent such information with respect to the Collateral (including the identity of the Collateral or such components thereof as may have been reasonably requested by the Collateral Agent, the value and location of such Collateral, etc.) as may be reasonably requested by the Collateral Agent. Without limiting the forgoing, each Assignor agrees that it shall promptly (and in any event within 10 Business Days after its receipt of the respective request (or such longer period as may be acceptable to the Collateral Agent acting on the instructions of the requisite holders of the Notes)) furnish to the Collateral Agent such updated Annexes hereto as may from time to time be reasonably requested by the Collateral Agent; provided, however, that the Collateral Agent shall have no duty to so request unless directed to do so by the requisite holders of the Notes in accordance with the Indenture. Each Assignor agrees that it shall, concurrently with the delivery of annual financial statements pursuant to Section 5.03(1) of the Indenture, furnish to the Collateral Agent, to the extent there are any changes to such Annexes, updated Annexes A through F, inclusive, H through K, inclusive, and P through S, inclusive, hereto and be deemed to have made each representation or warranty set forth herein referencing such Annexes as of the date of delivery thereof (rather than the date of this Agreement).
6.4 Further Actions. Each Assignor will, at its own expense and upon the reasonable request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which are or may be necessary to perfect, preserve or protect its security interest in the Collateral to the extent otherwise required herein and not otherwise inconsistent with the provisions of Section 1.1(b); provided, however, that the Collateral Agent shall have no duty to so request unless directed to do so by the requisite holders of the Notes in accordance with the Indenture.
6.5 Financing Statements. Each Assignor agrees to execute (where applicable) and deliver to the Collateral Agent such financing statements, continuation statements or amendments thereof (under the UCC or otherwise) as the Collateral Agent may from time to time reasonably request or as are reasonably necessary to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby. Each Assignor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Assignor hereby authorizes the Collateral Agent to file any such financing statements, continuation statements or amendments (under the UCC or otherwise) without the signature of such Assignor where permitted by law (and such authorization includes describing the Collateral as “all assets” of such Assignor); provided, however, that the Collateral Agent shall have no liability or responsibility to make any such filings unless directed to do so by the requisite holders of the Notes in accordance with the Indenture or as the Collateral Agent may otherwise determine.
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Article VII
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
7.1 Remedies; Obtaining the Collateral Upon Default. Each Assignor agrees that, subject to the Indenture, if any Event of Default shall have occurred and be continuing then and in every such case, the Collateral Agent, in addition to any rights now or hereafter existing under applicable law and under the other provisions of this Agreement, shall have all rights as a secured creditor under any UCC, and such additional rights and remedies to which a secured creditor is entitled under the laws in effect in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from such Assignor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon such Assignor’s premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument or other obligation (including, without limitation, the Accounts and the Contracts) constituting the Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the Collateral Agent and may exercise any and all remedies of such Assignor in respect of such Collateral;
(iii) instruct all banks which have entered into a control agreement with the Collateral Agent to transfer all monies, securities, Instruments, other investments and other property or assets held by such depositary bank to the Cash Collateral Account;
(iv) sell, assign or otherwise liquidate any or all of the Collateral or any part thereof in accordance with Section 7.2 hereof, or direct such Assignor to sell, assign or otherwise liquidate any or all of the Collateral or any part thereof, and, in each case, take possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by directing such Assignor in writing to deliver the same to the Collateral Agent at any reasonable place or places designated by the Collateral Agent, in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or places so designated by the Collateral Agent and there delivered to the Collateral Agent;
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(y) store and keep any Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent as provided in Section 7.2 hereof; and
(z) while the Collateral shall be so stored and kept, provide such security and maintenance services as shall be reasonably necessary to protect the same and to preserve and maintain it in good condition;
(vi) license or sublicense, whether on an exclusive or nonexclusive basis, any Marks, Domain Names, Patents or Copyrights or Intellectual Property Rights included in the Collateral for such term and on such conditions and in such manner as the Collateral Agent shall determine;
(vii) apply any monies constituting Collateral or proceeds thereof in accordance with the provisions of Section 7.4; and
(viii) take any other action as specified in clauses (1) through (5), inclusive, of Section 9-607 of the UCC;
it being understood that each Assignor’s obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor of said obligation. By accepting the benefits of this Agreement and each other Collateral Document, the Notes Secured Parties expressly acknowledge and agree that this Agreement and each other Collateral Document may be enforced only by the action of the Collateral Agent and that no other Notes Secured Party shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Notes Secured Parties upon the terms of this Agreement, the Indenture and the other Indenture Documents.
7.2 Remedies; Disposition of the Collateral. If any Event of Default shall have occurred and be continuing then any Collateral repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and any other Collateral whether or not so repossessed by the Collateral Agent, may be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as are commercially reasonable and the Assignors hereby acknowledge and agree that any sale or disposition hereunder or in connection herewith shall constitute a commercially reasonable sale or disposition. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair at the expense of the relevant Assignor and the Collateral Agent shall have no liability or responsibility for the value received for any Collateral sold or disposed of, regardless of the fair market value of such Collateral prior to such sale or disposition. Any such sale, lease or other disposition may be effected by means of a public disposition or private disposition, effected in accordance with the applicable requirements (in each case if and to the extent applicable) of Sections 9-610 through 9-613 of the UCC and/or such other requirements of applicable law as may apply to the respective disposition. The Collateral Agent may, without notice or publication, adjourn any public or private disposition or cause the same to be adjourned from time to time by announcement at the time and place fixed for the disposition, and such disposition may be made at any time or place to which the disposition may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may bid for and become the purchaser (and may pay all or any portion of the purchase price by crediting Secured Obligations against the purchase price) of the Collateral or any item thereof, offered for disposition in accordance with this Section 7.2 without accountability to the relevant Assignor. If, under applicable law, the Collateral Agent shall be permitted to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor only such notice of disposition as shall be required by such applicable law. Each Assignor agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make such disposition or dispositions of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Assignor’s expense.
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7.3 Waiver of Claims. Except as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession or any such disposition except any damages which are the direct result of the Collateral Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision);
(ii) all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agent’s rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and each Assignor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant Assignor therein and thereto, and shall be a perpetual bar both at law and in equity against such Assignor and against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such Assignor.
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7.4 Application of Proceeds. (a) Subject to the terms of the Intercreditor Agreement, all monies and other property and assets collected or received by the Collateral Agent or any other Notes Secured Party upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies and other property and assets collected or received by the Collateral Agent hereunder or upon any distribution of (or on account of) Collateral (whether or not characterized as such) in connection with any case, proceeding or other action of the type described in Section 7.01(i) or (j) of the Indenture, shall be applied (1) first, to any amounts owed to the Collateral Agent and the Trustee hereunder or in connection with the transactions contemplated by the Indenture and (2) second, to the holders of the Secured Obligations that are then due, on a pro rata basis.
(b) It is understood that the Assignors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Secured Obligations.
(c) If any Notes Secured Party collects or receives any distribution to which it is not entitled under Section 7.4(a) hereof, such Notes Secured Party shall hold the same in trust for the Notes Secured Parties and shall forthwith deliver the same to the Trustee or the Collateral Agent, for the account of the Notes Secured Parties, to be applied in accordance with Section 7.4(a) hereof.
7.5 Remedies Cumulative. Each and every right, power and remedy hereby specifically given to the Collateral Agent shall be in addition to every other right, power and remedy specifically given to the Collateral Agent under this Agreement, the other Indenture Documents or now or hereafter existing at law, in equity or by statute and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning of the exercise of one shall not be deemed a waiver of the right to exercise any other or others. No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of any of the Secured Obligations shall impair any such right, power or remedy or shall be construed to be a waiver of any Default or Event of Default or an acquiescence thereof. No notice to or demand on any Assignor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent to any other or further action in any circumstances without notice or demand. In the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may recover reasonable expenses, including reasonable attorneys’ fees, and the amounts thereof shall be included in such judgment.
7.6 Discontinuance of Proceedings. In case the Collateral Agent shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case the relevant Assignor, the Collateral Agent and each holder of any of the Secured Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such proceeding had been instituted.
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Article VIII
INDEMNITY
8.1 Indemnity. Section 13.11 of the Indenture (Compensation and Indemnity) is hereby incorporated by reference as if fully set forth herein mutatis mutandis.
8.2 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Collateral Agent or any co-collateral agent as to which such Collateral Agent or co-collateral agent has the right to reimbursement shall constitute Secured Obligations secured by the Collateral. The indemnity obligations of each Assignor contained in this Article VIII shall continue in full force and effect notwithstanding the full payment of all of the other Secured Obligations and notwithstanding the full payment of all the Notes issued pursuant to the Indenture and the payment of all other Secured Obligations and notwithstanding the discharge thereof and the occurrence of the Termination Date and any such indemnity claim shall constitute a Secured Obligation.
Article IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such definitions shall be equally applicable to the singular and plural forms of the terms defined.
“Account” shall mean any “account” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, and in any event shall include but shall not be limited to, all rights to payment of any monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State.
“Agreement” shall mean this Security Agreement, as the same may be amended, modified, restated and/or supplemented from time to time in accordance with its terms.
“As-Extracted Collateral” shall mean “as-extracted collateral” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Assignor” shall have the meaning provided in the first paragraph of this Agreement.
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“Cash Collateral Account” shall mean a non-interest bearing cash collateral account established following the occurrence of an Event of Default and maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of the Notes Secured Parties.
“Chattel Paper” shall mean “chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. Without limiting the foregoing, the term “Chattel Paper” shall in any event include all Tangible Chattel Paper and all Electronic Chattel Paper.
“Commercial Tort Claim” shall mean any “commercial tort claim” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Commodity Account” shall mean any “commodity account” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Contract Rights” shall mean all rights of any Assignor under each Contract, including, without limitation, (i) any and all rights to receive and demand payments under any or all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts.
“Contracts” shall mean all contracts between any Assignor and one or more additional parties (including, without limitation, any Interest Rate Protection Agreements, Other Hedging Agreements, licensing agreements and any partnership agreements, joint venture agreements and limited liability company agreements and any agreement pursuant to which Assignor licenses or is otherwise granted any right, title or interest in any Intellectual Property Rights, or Software or other intangible property).
“Copyrights” shall mean any United States or foreign copyrights now or hereafter owned by any Assignor, including any registrations of any copyrights in the United States Copyright Office or any foreign equivalent office, as well as any application for a copyright registration now or hereafter made with the United States Copyright Office or any foreign equivalent office by any Assignor.
“Default” shall mean a “Default” or similar term as such defined in the Indenture, so long as such agreement is in effect.
“Deposit Account” shall mean any “deposit account” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Distribution” shall have the meaning provided in Section 7.4(a) of this Agreement.
“Documents” shall mean any “document” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Domain Names” shall mean all Internet domain names and associated URL addresses now or hereafter owned by any Assignor.
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“Electronic Chattel Paper” shall mean “electronic chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Equipment” shall mean any “equipment” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, and in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned by any Assignor and any and all additions, substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.
“Event of Default” shall mean an “Event of Default” or similar term as such term is defined in the Indenture, so long as any such agreement is in effect.
“Excluded Accounts” shall mean (i) any Deposit Account, Securities Account or Commodity Account, that when taken together with all of the other Deposit Accounts, Securities Accounts and Commodity Accounts not subject to “control agreements” in favor of the Collateral Agent, has not had a closing balance on any day since the date of this Agreement that exceeds $500,000, (ii) any zero balance account, (iii) any bona fide trust account, escrow account or fiduciary account (in each case, for the benefit of a third party) or security deposits established pursuant to statutory obligations and escrow accounts established pursuant to contractual obligations to third parties for casualty payments and insurance proceeds, in each case in the ordinary course of business, (iv) any Excluded Deposit Account and (vi) the accounts listed on Annex G.
“Excluded Deposit Accounts” shall mean any Deposit Account, Securities Account or Commodity Account that is an Excluded Asset described in clause (6) of the definition of the term “Excluded Assets” in the Indenture.
“First Lien Agent” shall have the meaning provided in the First Priority Intercreditor Agreement.
“First Lien Creditors” shall have the meaning provided in the First Priority Intercreditor Agreement.
“Fixtures” shall mean “fixtures” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“General Intangible” shall mean any “general intangible” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Goods” shall mean “goods” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Instrument” shall mean any “instrument” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Intellectual Property Rights” means all rights anywhere in the world arising under or associated with the following: copyrights, Internet domain names and associated URL addresses, trademarks, service marks, trade dress and trade names, patents, trade secrets, confidential or proprietary information, and any other similar or equivalent intellectual property rights.
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“Interest Rate Protection Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement or other similar agreement or arrangement.
“Inventory” shall mean merchandise, inventory and goods, and all additions, substitutions and replacements thereof and all accessions thereto, wherever located, together with all goods, supplies, incidentals, packaging materials, labels, materials and any other items used or usable in manufacturing, processing, packaging or shipping same, in all stages of production from raw materials through work in process to finished goods, and all products and proceeds of whatever sort and wherever located any portion thereof which may be returned, rejected, reclaimed or repossessed by the Collateral Agent from any Assignor’s customers, and shall specifically include all “inventory” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Investment Property” shall mean “investment property” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Letter of Credit” shall mean “letter of credit” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Letter-of-Credit Rights” shall mean “letter-of-credit rights” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Location” of any Assignor, shall mean such Assignor’s “location” as determined pursuant to Section 9-307 of the UCC.
“Marks” shall mean all right, title and interest in and to any trademarks, service marks, trade dress and trade names now or hereafter owned by any Assignor, including any registration or application for registration of any trademarks and service marks, which are registered or filed in the United States Patent and Trademark Office or the equivalent thereof in any state of the United States or any equivalent foreign office or agency, as well as any unregistered trademarks and service marks now or hereafter owned by any Assignor.
“Material Adverse Effect” shall mean (i) a material adverse effect on the business, operations, property, assets, liabilities, condition (financial or otherwise) or operating results of Company and its Restricted Subsidiaries taken as a whole, or (ii) a material adverse effect (x) on the rights or remedies of the Collateral Agent hereunder or under any other Indenture Document, (y) on the ability of any Assignor to perform its obligations to the Collateral Agent hereunder or under any other Indenture Document or (z) the legality, validity, binding effect or enforceability of this Agreement or any of the other Indenture Documents.
“Other Hedging Agreements” shall mean any foreign exchange contracts, currency swap agreements, commodity agreements or other similar arrangements, or arrangements designed to protect against fluctuations in currency values or commodity prices.
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“Patents” shall mean any patent now or hereafter owned by an Assignor, and any divisions, continuations (including, but not limited to, continuations-in-parts) and improvements thereof, as well as any application for a patent now or hereafter owned by any Assignor.
“Permits” shall mean, to the extent permitted to be assigned by the terms thereof or by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations of or from any governmental authority or agency.
“Proceeds” shall mean all “proceeds” as such term is defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof and, in any event, shall also include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or any Assignor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Assignor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.
“Registered Organization” shall have the meaning provided in the Uniform Commercial Code as in effect in the State of New York.
“Secured Obligations” shall mean, collectively, the Indenture Obligations of the Company and each Assignor or Guarantor (including, without limitation, pursuant to the Guarantees thereof by each Guarantor).
“Securities Accounts” shall mean all “securities accounts” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Software” shall mean “software” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Supporting Obligations” shall mean any “supporting obligation” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor, or in which any Assignor has any rights, and, in any event, shall include, but shall not be limited to all of such Assignor’s rights in any Letter or Credit or Letter-of-Credit Right or secondary obligation that supports the payment or performance of, and all security for, any Account, Chattel Paper, Document, General Intangible, Instrument or Investment Property.
“Tangible Chattel Paper” shall mean “tangible chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Termination Date” shall mean the date upon which (A) a Legal Defeasance or Covenant Defeasance shall have been consummated pursuant to Sections 9.02 or 9.03, respectively, of the Indenture or (B) the Indenture shall have been discharged pursuant to Article 4 thereof.
“Timber-to-be-Cut” shall mean “timber-to-be-cut” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
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“Trade Secrets” shall mean all confidential or proprietary information owned by an Assignor in each case that is held as a trade secret and from which an Assignor derives independent economic value, including, without limitation, know-how, manufacturing and production processes and techniques, inventions, research and development information, databases and data, including, without limitation, technical data, financial, design, manufacturing, engineering, assembly, installation, use, operation, sales, servicing, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information.
“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.
Article X
MISCELLANEOUS
10.1 Notices. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by hand or overnight courier service, mailed by certified or registered mail or sent by electronic mail. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received. Notices delivered through electronic communications to the extent provided in Section 12.01 of the Indenture, shall be effective as provided in such Section 12.01 of the Indenture. All notices and other communications shall be in writing and addressed as follows:
(a) if to any Assignor, c/o:
CURO Group Holdings Corp.
200 W. Hubbard Street, 8th Floor
Chicago IL 60654
Attention: Chief Executive Officer
Email: [***]
(b) if to the Collateral Agent, at:
U.S. Bank Trust Company, National Association,
as Collateral Agent
100 Wall Street, Suite 600
New York, NY 1005
Attention: Administrator, CURO Group Holdings Corp.
or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.
10.2 Waiver; Amendment. Except as provided in Sections 10.8 and 10.12 hereof (or as provided in the other Collateral Documents), none of the terms and conditions of this Agreement or any other Collateral Document may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Assignor directly affected thereby (it being understood that the addition or release of any Assignor hereunder shall not constitute a change, waiver, discharge or termination affecting any Assignor other than the Assignor so added or released) and the Collateral Agent (with the written consent of the requisite percentage of Holders in accordance with the Indenture).
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10.3 Obligations Absolute. The obligations of each Assignor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of such Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or any other Indenture Document; or (c) any amendment to or modification of any Indenture Document or any security for any of the Secured Obligations; whether or not such Assignor shall have notice or knowledge of any of the foregoing.
10.4 Successors and Assigns. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 10.8 hereof, (ii) be binding upon each Assignor, its successors and permitted assigns; provided, however, that no Assignor shall assign any of its rights or obligations hereunder without the prior written consent of the Collateral Agent (with the prior written consent of the requisite percentage of Holders in accordance with the Indenture) or as otherwise permitted by the Indenture Documents, and (iii) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other Notes Secured Parties and their respective successors, transferees and permitted assigns. All agreements, statements, representations and warranties made by each Assignor herein or in any certificate or other instrument delivered by such Assignor or on its behalf under this Agreement shall be considered to have been relied upon by the Notes Secured Parties and shall survive the execution and delivery of this Agreement and the other Indenture Documents regardless of any investigation made by the Notes Secured Parties or on their behalf.
10.5 Headings Descriptive. The headings of the several sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
10.6 GOVERNING LAW; WAIVER OF JURY TRIAL. Sections 12.07 and 12.15 of the Indenture are hereby incorporated by this reference, mutatis mutandis.
10.7 Assignor’s Duties. It is expressly agreed, anything herein contained to the contrary notwithstanding, that, prior to the Termination Date, each Assignor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Assignor under or with respect to any Collateral.
10.8 Termination; Release. (a) After the Termination Date, this Agreement shall automatically and irrevocably terminate (provided that all indemnities set forth herein including, without limitation, in Section 8.1 hereof, shall survive such termination) and the Collateral Agent, at the written request and expense of the respective Assignor, will promptly execute and deliver to such Assignor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement.
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(b) The Liens securing the Collateral may be released from time to time in accordance with Article 13 of the Indenture. Furthermore, upon the release of any Guarantor from its Notes Guarantee in accordance with the provisions of the Indenture, such Assignor (and the Collateral at such time assigned by the respective Assignor pursuant hereto) shall be automatically and irrevocably released from this Agreement.
(c) The Collateral Agent shall have no liability whatsoever to any other Notes Secured Party as the result of any release of Collateral by it in accordance with (or which the Collateral Agent in the absence of gross negligence and willful misconduct believes to be in accordance with) this Section 10.8.
10.9 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart hereof by facsimile or electronic transmission shall be effective as delivery of an original executed counterpart hereof. A set of counterparts executed by all the parties hereto shall be lodged with the Company and the Collateral Agent.
10.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
10.11 The Collateral Agent and the Other Secured Parties. The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in the Indenture. The Collateral Agent shall act hereunder subject to the terms and conditions set forth herein and in the Indenture. The provisions of Article 13 of the Indenture shall inure to the benefit of the Collateral Agent, and shall be binding upon all Assignors and all Notes Secured Parties, in connection with this Agreement and the other Indenture Documents. Without limiting the generality of the foregoing, (i) the Collateral Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing and (ii) the Collateral Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Indenture Documents that the Collateral Agent may be required in writing to exercise by the requisite holders of the Notes. Notwithstanding anything to the contrary in this Agreement or otherwise, in no event shall the Collateral Agent be responsible for, or have any duty or obligation with respect to, the recording, filing, registering, perfection, continuation, protection or maintenance of the security interests or Liens intended to be created by this Agreement (including the preparation, filing or continuation of any Uniform Commercial Code financing or continuation statements or similar documents or instruments), nor shall the Collateral Agent be responsible for, and the Collateral Agent makes no representation regarding, the validity, enforceability, effectiveness or priority of this Agreement or the security interests or Liens intended to be created hereby.
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10.12 Additional Assignors. It is understood and agreed that any Guarantor that desires to become an Assignor hereunder, or is required to execute a counterpart of this Agreement after the date hereof pursuant to the requirements of the Indenture or any other Indenture Document, shall become an Assignor hereunder by (x) executing a joinder agreement in the form of Annex O hereto and delivering same to the Collateral Agent, in each case as may be requested by (and in form and substance reasonably satisfactory to) the Collateral Agent, (y) delivering supplements to Annexes A through F, inclusive, H through K, inclusive, and P through S, inclusive, hereto as are necessary to cause such Annexes to be complete and accurate with respect to such additional Assignor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Assignor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken.
10.13 Intercreditor Agreement. Without limiting the generality of the final paragraph of Section 1.1(b): (a) the Liens granted hereunder in favor of the Collateral Agent for the benefit of the Notes Secured Parties in respect of the Collateral and the exercise of any right related thereto thereby shall be subject, in each case, to the terms of the Intercreditor Agreement; and (b) notwithstanding anything to the contrary herein, any provision hereof that requires (or any representation or warranty hereunder to the extent that it would have the effect of requiring) any Assignor to (i) deliver any Collateral to the Collateral Agent, or (ii) provide that the Collateral Agent have control over such Collateral (or, in the case of any representation or warranty hereunder, shall be deemed to be true) by (A) with respect to subclause (i) hereof, the delivery of such Collateral by such Assignor to the First Lien Agent for the benefit of the First Lien Creditors and the Notes Secured Parties pursuant to Section 4.7 of the First Priority Intercreditor Agreement, and (B) with respect to subclause (ii) hereof, providing that the First Lien Agent be provided with control with respect to such Collateral of such Assignor for the benefit of the secured parties under the First Priority Collateral Documents and the Notes Secured Parties pursuant to Section 4.7 of the First Priority Intercreditor Agreement.
[Remainder of this page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first above written.
| CURO GROUP HOLDINGS CORP., | ||
| as an Assignor | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | Chief Executive Officer | |
| CURO FINANCIAL TECHNOLOGIES CORP. | ||
| CURO INTERMEDIATE HOLDINGS CORP. | ||
| CURO MANAGEMENT LLC | ||
| SOUTHERNCO, INC. | ||
| FIRST HERITAGE CREDIT, LLC | ||
| FIRST HERITAGE CREDIT OF ALABAMA, LLC | ||
| FIRST HERITAGE CREDIT OF LOUISIANA, LLC | ||
| FIRST HERITAGE CREDIT OF MISSISSIPPI, LLC | ||
| FIRST HERITAGE CREDIT OF SOUTH CAROLINA, LLC | ||
| FIRST HERITAGE CREDIT OF TENNESSEE, LLC | ||
| each as an Assignor | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
[Signature Page to Security Agreement]
| CURO VENTURES, LLC | ||
| ATTAIN FINANCE, LLC | ||
| AD ASTRA RECOVERY SERVICES, INC. | ||
| CURO COLLATERAL SUB, LLC | ||
| CURO CREDIT, LLC | ||
| SOUTHERN FINANCE OF SOUTH CAROLINA, INC. | ||
| SOUTHERN FINANCE OF TENNESSEE, INC. | ||
| COVINGTON CREDIT, INC. | ||
| COVINGTON CREDIT OF GEORGIA, INC. | ||
| COVINGTON CREDIT OF ALABAMA, INC. | ||
| COVINGTON CREDIT OF TEXAS, INC. | ||
| HEIGHTS FINANCE HOLDING CO. | ||
| HEIGHTS FINANCE CORPORATION, an Illinois corporation | ||
| HEIGHTS FINANCE CORPORATION, a Tennessee corporation | ||
| QUICK CREDIT CORPORATION | ||
| each as an Assignor | ||
| By: | /s/ Gary L. Fulk | |
| Name: | Gary L. Fulk | |
| Title: | President | |
| ENNOBLE FINANCE, LLC | ||
| as an Assignor | ||
| By: Curo Intermediate Holdings Corp. | ||
| Its: Sole Member | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
[Signature Page to Security Agreement]
| Accepted and Agreed to: | ||
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, | ||
| as Collateral Agent | ||
| By: | /s/ Christopher J. Grell | |
| Name: | Christopher J. Grell | |
| Title: | Vice President | |
[Signature Page to Security Agreement]
Exhibit 10.6
Execution Version
PLEDGE AGREEMENT
among
CURO GROUP HOLDINGS CORP.,
CERTAIN SUBSIDIARIES OF CURO GROUP HOLDINGS CORP.
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as COLLATERAL AGENT
Dated as of May 15, 2023
TABLE OF CONTENTS
Page
| 1. | SECURITY FOR OBLIGATIONS | 1 | |
| 2. | DEFINITIONS | 2 | |
| 3. | PLEDGE OF SECURITIES, ETC. | 4 | |
| 3.1 | Pledge | 4 | |
| 3.2 | Procedures | 7 | |
| 3.3 | Subsequently Acquired Collateral | 9 | |
| 3.4 | Transfer Taxes | 10 | |
| 3.5 | Certain Representations and Warranties Regarding the Collateral | 10 | |
| 4. | APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. | 10 | |
| 5. | VOTING, ETC., WHILE NO EVENT OF DEFAULT | 10 | |
| 6. | DIVIDENDS AND OTHER DISTRIBUTIONS | 11 | |
| 7. | REMEDIES IN CASE OF AN EVENT OF DEFAULT | 11 | |
| 8. | REMEDIES, CUMULATIVE, ETC. | 13 | |
| 9. | APPLICATION OF PROCEEDS | 13 | |
| 10. | PURCHASERS OF COLLATERAL | 13 | |
| 11. | INDEMNITY | 14 | |
| 12. | COLLATERAL AGENT NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER | 14 | |
| 13. | FURTHER ASSURANCES; POWER-OF-ATTORNEY | 15 | |
| 14. | THE COLLATERAL AGENT | 15 | |
| 15. | TRANSFER BY THE PLEDGORS | 16 | |
| 16. | REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS | 16 | |
| 17. | LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION); JURISDICTION OF ORGANIZATION; LOCATION; FEDERAL EMPLOYER IDENTIFICATION NUMBER; CHANGES THERETO; ETC. | 18 | |
| 18. | PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. | 19 | |
| 19. | SALE OF COLLATERAL WITHOUT REGISTRATION | 20 | |
| 20. | TERMINATION; RELEASE | 20 | |
| 21. | NOTICES, ETC. | 21 | |
| 22. | WAIVER; AMENDMENT | 21 | |
| 23. | SUCCESSORS AND ASSIGNS | 22 | |
| 24. | HEADINGS DESCRIPTIVE | 22 | |
| 25. | GOVERNING LAW | 22 | |
| 26. | PLEDGOR’S DUTIES | 22 | |
| 27. | COUNTERPARTS | 22 | |
| 28. | SEVERABILITY | 22 |
| 29. | RECOURSE | 22 |
| 30. | ADDITIONAL PLEDGORS | 23 |
| 31. | LIMITED OBLIGATIONS | 23 |
| 32. | RELEASE OF PLEDGORS | 23 |
| 33. | RIGHTS AND OBLIGATIONS SUBJECT TO INTERCREDITOR AGREEMENT | 23 |
| 34. | ANNUAL UPDATE | 23 |
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| ANNEX A | - | SCHEDULE OF SUBSIDIARIES |
| ANNEX B | - | SCHEDULE OF STOCK |
| ANNEX C | - | SCHEDULE OF NOTES |
| ANNEX D | - | SCHEDULE OF LIMITED LIABILITY COMPANY INTERESTS |
| ANNEX E | - | SCHEDULE OF PARTNERSHIP INTERESTS |
| ANNEX F | - | FORM OF AGREEMENT REGARDING UNCERTIFICATED SECURITIES, LIMITED LIABILITY COMPANY INTERESTS AND PARTNERSHIP INTERESTS |
| ANNEX G | - | FORM OF PLEDGE AGREEMENT JOINDER |
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PLEDGE AGREEMENT
This PLEDGE AGREEMENT (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Agreement”), dated as of May 15, 2023, is among each of the undersigned pledgors (each, a “Pledgor” and, together with any other entity that becomes a pledgor hereunder pursuant to Section 30 hereof, the “Pledgors”) and U.S. Bank Trust Company, National Association, as Collateral Agent, for the benefit of the Notes Secured Parties. Except as otherwise defined herein, all capitalized terms used herein and defined in the Indenture (as defined below) shall be used herein as therein defined.
WHEREAS, CURO Group Holdings Corp. (the “Company”), the Guarantors from time to time party thereto, the Collateral Agent and Trustee have entered into an Indenture, dated as of May 15, 2023 (as amended, modified, restated and/or supplemented from time to time, the “Indenture”) for the benefit of each other and for the equal and ratable benefit of the Holders of the 7.500% Senior 1.5 Lien Secured Notes due 2028 (the “New Notes”);
WHEREAS, pursuant to the Indenture, each Pledgor has jointly and severally guaranteed to the Notes Secured Parties the payment when due of all Indenture Obligations as described (and defined) therein;
WHEREAS, in order to induce (i) the Holders to hold the New Notes and (ii) the Collateral Agent to act as trustee and as collateral agent, the Pledgors have agreed to grant to the Collateral Agent a continuing security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, their respective Secured Obligations (as defined in the Security Agreement);
WHEREAS, the (i) First Priority Intercreditor Agreement governs the relative rights and priorities of the Notes Secured Parties, the Second Lien Creditors (as defined therein) and the First Lien Creditors (as defined therein) and (ii) Junior Intercreditor Agreement governs the relative rights and priorities of the Notes Secured Parties and the Second Lien Creditors (as defined therein) (clauses (i) and (ii) being collectively referred to as the “Intercreditor Agreement”), in each case, in respect of all of the Collateral; and
WHEREAS, the Pledgors will obtain benefits from the issuance of the New Notes under the Indenture and, accordingly, the Pledgors desire to create a security interest in favor of and pledge of the pledged Collateral to the Collateral Agent for its benefit and for the benefit of the Notes Secured Parties under the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Notes Secured Parties and hereby covenants and agrees with the Collateral Agent for the benefit of the Notes Secured Parties as follows:
| 1. | SECURITY FOR OBLIGATIONS. |
| (a) | This Agreement is made by each Pledgor for the benefit of the Notes Secured Parties to secure the Secured Obligations, it being acknowledged and agreed that the “Secured Obligations” shall include New Notes described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement. |
| (b) | Notwithstanding anything herein to the contrary, the lien and security interest granted pursuant to this Agreement and the exercise of any right or remedy hereunder are subject to the provisions of the Intercreditor Agreement at any time the Intercreditor Agreement is in effect. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control at any time the Intercreditor Agreement is in effect. In the event of any conflict or inconsistency between the provisions of the Indenture and this Agreement relating to the duties of the Collateral Agent the provisions of the Indenture shall govern and control. |
| 2. | DEFINITIONS. (a) Unless otherwise defined herein, all capitalized terms used herein and defined in the Indenture shall be used herein as therein defined. Reference to singular terms shall include the plural and vice versa. |
| (b) | The following capitalized terms used herein shall have the definitions specified below: |
“Adverse Claim” shall have the meaning given such term in Section 8-102(a)(1) of the UCC.
“Agreement” shall have the meaning set forth in the first paragraph hereof.
“Certificated Security” shall have the meaning given such term in Section 8-102(a)(4) of the UCC.
“Clearing Corporation” shall have the meaning given such term in Section 8-102(a)(5) of the UCC.
“Collateral” shall have the meaning set forth in Section 3.1 hereof.
“Collateral Accounts” shall mean any and all accounts established and maintained by the Collateral Agent in the name of any Pledgor to which Collateral may be credited.
“Company” shall have the meaning set forth in the recitals hereto.
“Domestic Corporation” shall have the meaning set forth in the definition of “Stock”.
“Event of Default” shall mean an “Event of Default” or similar term as such term is defined in the Indenture, so long as any such agreement is in effect.
“Exempted Foreign Entity” shall mean any CFC (other than a Canadian Subsidiary).
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“Financial Asset” shall have the meaning given such term in Section 8-102(a)(9) of the UCC.
“First Lien Agent” shall have the meaning provided in the First Priority Intercreditor Agreement.
“First Lien Creditors” shall have the meaning provided in the First Priority Intercreditor Agreement.
“First Lien Obligations” shall have the meaning provided in the First Priority Intercreditor Agreement.
“Foreign Corporation” shall have the meaning set forth in the definition of “Stock”.
“Indenture” shall have the meaning set forth in the recitals hereto.
“Instrument” shall have the meaning given such term in Section 9-102(a)(47) of the UCC.
“Investment Property” shall have the meaning given such term in Section 9-102(a)(49) of the UCC.
“Limited Liability Company Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned by any Pledgor or represented by any Limited Liability Company Interest.
“Limited Liability Company Interests” shall mean the entire limited liability company membership interest at any time owned by any Pledgor in any limited liability company.
“Location” of any Pledgor has the meaning given such term in Section 9-307 of the UCC.
“Non-Voting Equity Interests” shall mean all Equity Interests of any Person that are not Voting Equity Interests.
“Notes” shall mean (x) all intercompany notes at any time issued to each Pledgor and (y) all other promissory notes from time to time issued to, or held by, each Pledgor.
“Partnership Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned by any Pledgor or represented by any Partnership Interest.
“Partnership Interest” shall mean the entire general partnership interest or limited partnership interest at any time owned by any Pledgor in any general partnership or limited partnership.
“Pledged Notes” shall mean all Notes at any time pledged or required to be pledged hereunder.
“Pledgor” shall have the meaning set forth in the first paragraph hereof.
“Proceeds” shall have the meaning given such term in Section 9-102(a)(64) of the UCC.
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“Registered Organization” shall have the meaning given such term in Section 9-102(a)(70) of the UCC.
“Secured Obligations” shall have the meaning provided in the Security Agreement.
“Securities Intermediary” shall have the meaning given such term in Section 8-102(14) of the UCC.
“Security” and “Securities” shall have the meaning given such term in Section 8-102(a)(15) of the UCC and shall in any event also include all Stock and all Notes.
“Security Entitlement” shall have the meaning given such term in Section 8-102(a)(17) of the UCC.
“Stock” shall mean (x) with respect to corporations incorporated under the laws of the United States or any State thereof or the District of Columbia (each, a “Domestic Corporation”), all of the issued and outstanding shares of capital stock of any Domestic Corporation at any time owned by any Pledgor and (y) with respect to corporations not Domestic Corporations (each, a “Foreign Corporation”), all of the issued and outstanding shares of capital stock of any Foreign Corporation at any time owned by any Pledgor.
“Termination Date” shall mean the date of the repayment of the Loans in full and the termination of all Commitments (other than Additional Secured Obligations and contingent indemnification or expense reimbursement obligations not then due).
“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York from time to time; provided that all references herein to specific Sections or subsections of the UCC are references to such Sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of New York on the date hereof.
“Uncertificated Security” shall have the meaning given such term in Section 8-102(a)(18) of the UCC.
“Voting Equity Interests” of any Person shall mean all classes of Equity Interests of such Person entitled to vote.
| 3. | PLEDGE OF SECURITIES, ETC. |
3.1 Pledge. To secure the Secured Obligations now or hereafter owed or to be performed by such Pledgor, each Pledgor does hereby grant, pledge and assign to the Collateral Agent for the benefit of the Notes Secured Parties, and does hereby create a continuing security interest in favor of the Collateral Agent for the benefit of the Notes Secured Parties in and a continuing lien on, all of its right, title and interest in and to the following, whether now existing or hereafter from time to time acquired, wherever located (collectively, the “Collateral”):
| (a) | each of the Collateral Accounts (to the extent a security interest therein is not created pursuant to the Security Agreement), including any and all assets of whatever type or kind deposited by such Pledgor in any such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, monies, checks, drafts, Instruments, Securities or interests therein of any type or nature deposited or required by the Indenture Documents to be deposited in such Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing; |
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| (b) | all Securities owned or held by such Pledgor from time to time and all options and warrants owned by such Pledgor from time to time to purchase Securities; |
| (c) | to the extent not otherwise included, all rights of any nature whatsoever in respect of the Securities owned or held by such Pledgor from time to time, including, without limitation, all voting rights and economic rights in the Pledgor of the Securities; |
| (d) | all Limited Liability Company Interests owned by such Pledgor from time to time and all of its right, title and interest in each limited liability company to which each such Limited Liability Company Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Limited Liability Company Interests and applicable law: |
(A) all its capital therein and its interest in all profits, income, surpluses, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests;
(B) all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests;
(D) all present and future claims, if any, of such Pledgor against any such limited liability company for monies loaned or advanced, for services rendered or otherwise;
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(E) all of such Pledgor’s rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any such limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Limited Liability Company Interests and any such limited liability company, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and
(F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;
| (e) | all Partnership Interests owned by such Pledgor from time to time and all of its right, title and interest in each partnership to which each such Partnership Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Partnership Interests and applicable law: |
(A) all its capital therein and its interest in all profits, income, surpluses, losses, Partnership Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Partnership Interests;
(B) all other payments due or to become due to such Pledgor in respect of Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of such Pledgor against any such partnership for monies loaned or advanced, for services rendered or otherwise;
(E) all of such Pledgor’s rights under any partnership agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Partnership Interests and any such partnership, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and
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(F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;
| (f) | all Financial Assets and Investment Property owned by such Pledgor from time to time; |
| (g) | all Security Entitlements owned by such Pledgor from time to time in any and all of the foregoing; and |
| (h) | all Proceeds of any and all of the foregoing; |
provided that (x) no Pledgor shall be required at any time to pledge hereunder more than 65.0% of all of the outstanding voting Capital Stock of any direct Exempted Foreign Entity and (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each direct Exempted Foreign Entity at any time and from time to time acquired by such Pledgor, which Non-Voting Equity Interests shall not be subject to the limitations described in preceding clause (x).
Notwithstanding any of the other provisions set forth in this Section 3.1 to the contrary, the term Collateral shall not include, and this Agreement shall not constitute a grant of a security interest in any Excluded Assets; provided that immediately upon the ineffectiveness, lapse or termination of any restriction or condition covering, or resulting in, any asset or other property of a Pledgor constituting Excluded Assets, the Collateral shall (in the absence of any other applicable limitation) include, and such Pledgor shall be deemed to have granted a security interest in, such Pledgor’s right, title and interest in and to such asset or other property and such asset or other property shall no longer constitute Excluded Assets.
3.2 Procedures. (a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by such Pledgor) be pledged pursuant to Section 3.1 of this Agreement, subject to the provisions of the Intercreditor Agreement, and, in addition thereto, such Pledgor shall (to the extent provided below) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral) for the benefit of the Collateral Agent and the other Notes Secured Parties:
(i) with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall physically deliver such Certificated Security to the Collateral Agent, endorsed in blank;
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(ii) with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall cause the issuer of such Uncertificated Security to either (A) issue to such Pledgor a Certificated Security in lieu of such Uncertificated Security and follow the procedure set forth in Section 3.2(a)(i) hereof or (B) duly authorize, execute, and deliver to the Collateral Agent, an agreement for the benefit of the Collateral Agent and the other Notes Secured Parties substantially in the form of Annex F hereto pursuant to which such issuer agrees to comply with any and all instructions originated by the Collateral Agent without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security (and any Partnership Interests and Limited Liability Company Interests issued by such issuer) originated by any other Person other than a court of competent jurisdiction (it being understood that the Collateral Agent only will give such instructions to any issuer upon the occurrence and during the continuance of an Event of Default);
(iii) with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), such Pledgor shall promptly notify the Collateral Agent thereof and shall promptly take (x) all actions required (i) to comply with the applicable rules of such Clearing Corporation or Securities Intermediary and (ii) to perfect the security interest of the Collateral Agent under applicable law (including, in any event, under Sections 9-314(a), (b) and (c), 9-106 and 8-106(d) of the UCC) and (y) such other actions as shall be necessary or desirable to effect the foregoing;
(iv) with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), (1) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate and is a Security for purposes of the UCC, such Pledgor shall follow the procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate or is not a Security for purposes of the UCC, such Pledgor shall follow the procedure set forth in Section 3.2(a)(ii) hereof;
(v) with respect to any Note (other than Notes with an individual principal amount of $250,000 or less at any time outstanding), physical delivery of such Note to the Collateral Agent, endorsed in blank; and
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(vi) with respect to cash proceeds from any of the Collateral described in Section 3.1 hereof, (i) establishment by the Collateral Agent of a cash account (unless such an account is already in existence) in the name of such Pledgor over which the Collateral Agent shall have “control” within the meaning of the UCC and at any time any Event of Default is in existence no withdrawals or transfers may be made therefrom by any Person except with the prior written consent of the Collateral Agent and (ii) deposit of such cash in such cash account.
| (b) | In addition to the actions required to be taken pursuant to Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Collateral: |
(i) with respect to all Collateral of such Pledgor whereby or with respect to which the Collateral Agent may obtain “control” thereof within the meaning of Section 8- 106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of New York), such Pledgor shall take all actions as may be reasonably necessary or as reasonably requested from time to time by the Collateral Agent so that “control” of such Collateral is obtained and at all times held by the Collateral Agent; and
(ii) each Pledgor shall from time to time cause appropriate financing statements (on appropriate forms) under the Uniform Commercial Code as in effect in the various relevant States, covering all Collateral hereunder, to be filed in the relevant filing offices so that at all times the Collateral Agent’s security interest in all Investment Property and other Collateral which can be perfected by the filing of such financing statements (in each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States, including, without limitation, Section 9-312(a) of the UCC) is so perfected.
3.3 Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase, stock dividend, distribution or otherwise) any additional Collateral at any time or from time to time after the date hereof, (i) such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, such Pledgor will thereafter take (or cause to be taken) all action (as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral) with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver to the Collateral Agent (i) a certificate executed by an Authorized Officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Collateral Agent for the benefit of the Notes Secured Parties hereunder and (ii) supplements to Annexes A through G hereto as are necessary to cause such Annexes to be complete and accurate at such time. Without limiting the foregoing, each Pledgor shall be required to pledge hereunder the Equity Interests of any Exempted Foreign Entity at any time and from time to time after the date hereof acquired by such Pledgor, provided that (x) no Pledgor shall be required at any time to pledge hereunder more than 65.0% of all of the outstanding voting Capital Stock of any direct Exempted Foreign Entity and (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each direct Exempted Foreign Entity at any time and from time to time acquired by such Pledgor.
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3.4 Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required, or such other documentation reasonably satisfactory to the Collateral Agent as will establish that any applicable tax has been paid, in connection with the pledge of such Collateral.
3.5 Certain Representations and Warranties Regarding the Collateral. Each Pledgor represents and warrants that on the date hereof: (i) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in Annex A hereto; (ii) the Stock (and any warrants or options to purchase Stock) constituting Collateral held by such Pledgor consists of the number and type of shares of the stock (or warrants or options to purchase any stock) of the corporations as described in Annex B hereto; (iii) such Stock referenced in clause (ii) of this paragraph constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex B hereto; (iv) the Notes with a principal amount greater than $250,000 held by such Pledgor consist of the promissory notes described in Annex C hereto where such Pledgor is listed as the lender; (v) the Limited Liability Company Interests constituting Collateral held by such Pledgor consist of the number and type of interests of the Persons described in Annex D hereto; (vi) each such Limited Liability Company Interest referenced in clause (v) of this paragraph constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Annex D hereto; (vii) the Partnership Interests constituting Collateral held by such Pledgor consist of the number and type of interests of the Persons described in Annex E hereto; (viii) each such Partnership Interest referenced in clause (vii) of this paragraph constitutes that percentage or portion of the entire Partnership Interest of the partnership as set forth in Annex E hereto; (ix) the exact address of the chief executive officer of each such Pledgor is listed on Annex A to the Security Agreement; (x) the Pledgor has complied with the respective procedure set forth in Section 3.2(a) hereof with respect to each item of Collateral described in Annexes C through F hereto; and (xi) on the date hereof, such Pledgor owns no other Securities, Stock, Notes, Limited Liability Company Interests or Partnership Interests, in each case constituting Collateral, other than those listed in Annexes C through F hereof.
| 4. | APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Collateral Agent shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral, which may be held in the name of the relevant Pledgor, endorsed or assigned in blank. |
| 5. | VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there shall have occurred and be continuing an Event of Default, each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; provided that, in each case, no vote shall be cast or any consent, waiver or ratification given or any action taken or omitted to be taken which would violate, result in a breach of any covenant contained in, or be inconsistent with any of the terms of any Indenture Document, or which could reasonably be expected to have the effect of materially impairing the value of the Collateral or any part thereof or in a manner adverse to the position or interests of the Collateral Agent or any other Notes Secured Party in the Collateral, unless expressly permitted by the terms of the Indenture Documents. All such rights of each Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default has occurred and is continuing, and Section 7 hereof shall become applicable. |
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| 6. | DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall have occurred and be continuing an Event of Default, all cash dividends, cash distributions, cash Proceeds and other cash amounts payable in respect of the Collateral shall be paid to the respective Pledgor. The Collateral Agent shall be entitled to receive directly, and to retain as part of the Collateral in each case to the extent required to be pledged and delivered hereunder: |
| (a) | all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property paid or distributed by way of dividend or otherwise in respect of the Collateral; |
| (b) | all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash (although such cash may be paid directly to the respective Pledgor so long as no Event of Default then exists)) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and |
| (c) | all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash (although such cash may be paid directly to the respective Pledgor so long as no Event of Default has occurred and is continuing)) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate or other reorganization. |
Nothing contained in this Section 6 shall limit or restrict in any way the Collateral Agent’s right to receive the proceeds of the Collateral in any form in accordance with Section 3 of this Agreement. All dividends, distributions or other payments which are received by any Pledgor contrary to the provisions of this Section 6 or Section 7 hereof shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Pledgor and shall be forthwith paid over to the Collateral Agent as Collateral in the same form as so received (with any necessary endorsement).
| 7. | REMEDIES IN CASE OF AN EVENT OF DEFAULT. If there shall have occurred and be continuing an Event of Default, then and in every such case, subject to the provisions of the Intercreditor Agreement, the Collateral Agent shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement, any other Indenture Document or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Collateral Agent shall be entitled to exercise all the rights and remedies of a secured party under the UCC as in effect in any relevant jurisdiction and also shall be entitled, without limitation, to exercise the following rights, which each Pledgor hereby agrees to be commercially reasonable: |
| (a) | to receive all amounts payable in respect of the Collateral otherwise payable under Section 6 hereof to the respective Pledgor; |
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| (b) | to transfer all or any part of the Collateral into the Collateral Agent’s name or the name of its nominee or nominees; |
| (c) | to accelerate any Pledged Note which may be accelerated in accordance with its terms, and take any other lawful action to collect upon any Pledged Note (including, without limitation, to make any demand for payment thereon); |
| (d) | to vote (and exercise all rights and powers in respect of voting) all or any part of the Collateral (whether or not transferred into the name of the Collateral Agent) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Collateral Agent the proxy and attorney-in- fact of such Pledgor, with full power of substitution to do so); |
| (e) | at any time and from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or, notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise purchase or dispose (all of which are hereby waived by each Pledgor to the extent permitted by applicable law), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price or prices and on such terms as the Collateral Agent in compliance with any mandatory requirements of applicable law may determine, provided at least 10 days’ written notice of the time and place of any such sale shall be given to the respective Pledgor. The Collateral Agent shall not be obligated to make any such sale of Collateral regardless of whether any such notice of sale has theretofore been given. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security or the Secured Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Collateral Agent on behalf of the Notes Secured Parties may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Collateral Agent nor any other Notes Secured Party shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto; and |
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| (f) | to set off any and all Collateral against any and all Secured Obligations, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Secured Obligations. |
| 8. | REMEDIES, CUMULATIVE, ETC. Each and every right, power and remedy of the Collateral Agent provided for in this Agreement or in any other Indenture Document, or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Collateral Agent or any other Notes Secured Party of any one or more of the rights, powers or remedies provided for in this Agreement or any other Indenture Document or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Collateral Agent or any other Notes Secured Party of all such other rights, powers or remedies, and no failure or delay on the part of the Collateral Agent or any other Notes Secured Party to exercise any such right, power or remedy shall operate as a waiver thereof. No notice to or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent or any other Notes Secured Party to any other or further action in any circumstances without notice or demand. The Notes Secured Parties agree that this Agreement may be enforced only by the action of the Collateral Agent and that no other Notes Secured Party shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Notes Secured Parties upon the terms of this Agreement and the Security Agreement. |
| 9. | APPLICATION OF PROCEEDS. |
| (a) | Subject to the terms of the Intercreditor Agreement, all monies and other property and assets collected or received by the Collateral Agent or any other Notes Secured Party upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies and other property and assets collected or received by the Collateral Agent hereunder or upon any distribution of (or on account of) Collateral (whether or not characterized as such) in connection with any case, proceeding or other action of the type described in Sections 7.01(i) and (j) of the Indenture, shall be applied in the manner provided in Section 7.4 of the Security Agreement. |
| (b) | It is understood and agreed that each Pledgor shall remain jointly and severally liable with respect to its Secured Obligations to the extent of any deficiency between the amount of the proceeds of the Collateral pledged by it hereunder and the aggregate amount of such Secured Obligations. |
| 10. | PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Collateral Agent hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Collateral Agent or the officer making such sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication or non-application thereof. |
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| 11. | INDEMNITY. The indemnity obligations of each Pledgor contained in this Section 11 shall continue in full force and effect notwithstanding the full payment of all the New Notes issued under the Indenture, the resignation or removal of the Collateral Agent and the payment of all other Secured Obligations and notwithstanding the discharge thereof and the occurrence of the Termination Date. Section 13.11 of the Indenture (Compensation and Indemnity) and the other rights, protections and privileges afforded the Collateral Agent under the Indenture and the other Indenture Documents are hereby incorporated by reference as if fully set forth herein mutatis mutandis. |
| 12. | COLLATERAL AGENT NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a) Nothing herein shall be construed to make the Collateral Agent or any other Notes Secured Party liable as a member of any limited liability company or as a partner of any partnership and neither the Collateral Agent nor any other Notes Secured Party by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become the absolute owner of Collateral consisting of a Limited Liability Company Interest or a Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Collateral Agent, any other Notes Secured Party, any Pledgor and/or any other Person. |
| (b) | Except as provided in the last sentence of paragraph (a) of this Section 12, the Collateral Agent, by accepting this Agreement, did not intend to become a member of any limited liability company or a partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor, any limited liability company, partnership and/or any other Person either before or after an Event of Default shall have occurred. The Collateral Agent shall have only those powers set forth herein and the Notes Secured Parties shall assume none of the duties, obligations or liabilities of a member of any limited liability company or as a partner of any partnership or any Pledgor except as provided in the last sentence of paragraph (a) of this Section 12. |
| (c) | The Collateral Agent and the other Notes Secured Parties shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected. |
| (d) | The acceptance by the Collateral Agent of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Collateral Agent or any other Notes Secured Party to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral. |
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| 13. | FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees that it will join with the Collateral Agent in executing and, at such Pledgor’s own expense, file and refile under the UCC or other applicable law such financing statements, continuation statements and other documents, in such offices as shall be reasonably necessary or as the Collateral Agent may reasonably request and wherever required or permitted by law in order to perfect and preserve the Collateral Agent’s security interest in the Collateral hereunder and hereby authorizes the Collateral Agent to file financing statements and amendments thereto relative to all or any part of the Collateral (including, without limitation, financing statements which list the Collateral specifically and/or “all assets” as collateral without the signature of such Pledgor where permitted by law, and agrees to do such further acts and things and to execute and deliver to the Collateral Agent such additional conveyances, assignments, agreements and instruments as the Collateral Agent may reasonably request to carry into effect the purposes of this Agreement or to further assure and confirm unto the Collateral Agent its rights, powers and remedies hereunder or thereunder. |
| (b) | Each Pledgor hereby constitutes and appoints the Collateral Agent its true and lawful attorney-in-fact, irrevocably (until the termination of this Agreement in accordance with its terms or the release of such Pledgor from its obligations under this Agreement), with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from time to time solely after the occurrence and during the continuance of an Event of Default, to act, require, demand, receive, compound, recover, compromise and give acquittance for any and all monies and claims for monies due or to become due to such Pledgor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings and to execute any instrument which the Collateral Agent may request to accomplish the purposes of this Agreement, which appointment as attorney is coupled with an interest. The Collateral Agent and the other Notes Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Assignor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final and non-appealable judgment. |
| 14. | THE COLLATERAL AGENT. The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood, acknowledged and agreed by each Notes Secured Party that by accepting the benefits of this Agreement each such Notes Secured Party acknowledges and agrees that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement, the other Collateral Documents and the Indenture Documents. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in the other Collateral Documents and the Indenture Documents. The provisions of Article 13 of the Indenture shall inure to the benefit of the Collateral Agent, and shall be binding upon all Pledgors and all Notes Secured Parties, in connection with this Agreement and the other Indenture Documents. Without limiting the generality of the foregoing, (i) the duties of the Collateral Manager shall be ministerial and administrative in nature and the Collateral Agent shall not be subject to any trust, fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing and no implied covenants, responsibilities, duties, obligations or liabilities shall be read into this Agreement, the Intercreditor Agreement, the Indenture Documents and the Collateral Documents or otherwise exist against the Collateral Agent and (ii) the Collateral Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Indenture Documents that the Collateral Agent is required in writing to exercise in accordance with the Indenture Documents. Notwithstanding anything to the contrary in this Agreement, in no event shall the Collateral Agent (i) be liable or responsible for, or have any duty or obligation with respect to, the recording, filing, registering, perfection, protection or maintenance of the security interests or Liens intended to be created by this Agreement (including the preparation, filing or continuation of any Uniform Commercial Code financing or continuation statements or similar documents or instruments), (ii) be liable or responsible for, and the Collateral Agent makes no representation regarding, the validity, enforceability, effectiveness or priority of this Agreement or the security interests or Liens intended to be created hereby or (iii) be liable or responsible for any failure of the Pledgors or any party to the Intercreditor Agreement or the Indenture Documents to perform its obligations hereunder or thereunder. |
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| 15. | TRANSFER BY THE PLEDGORS. Except as permitted (i) prior to the date all Secured Obligations have been paid in full and (ii) thereafter, pursuant to the other Indenture Documents, no Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein. |
| 16. | REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each Pledgor represents, warrants and covenants as to itself and each of its Subsidiaries that: |
(i) it is the legal, beneficial and record owner of, and has good and marketable title to, all of its Collateral consisting of one or more Securities, Partnership Interests and Limited Liability Company Interests and that it has sufficient interest in all of its Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except the liens and security interests created by this Agreement and Permitted Liens);
(ii) it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement;
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(iii) this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable against such Pledgor in accordance with its terms, except to the extent that the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law);
(iv) except to the extent already obtained or made, no consent of any other party (including, without limitation, any stockholder, partner, member or creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any Governmental Authority is required to be obtained by such Pledgor in connection with (a) the execution, delivery or performance of this Agreement by such Pledgor, (b) the validity or enforceability of this Agreement against such Pledgor (except as set forth in clause (iii) above), (c) the perfection or enforceability of the Collateral Agent’s security interest in such Pledgor’s Collateral or (d) except for compliance with or as may be required by applicable securities laws, the exercise by the Collateral Agent of any of its rights or remedies provided herein;
(v) neither the execution, delivery or performance by such Pledgor of this Agreement or any other Indenture Document to which it is a party, nor compliance by it with the terms and provisions hereof and thereof nor the consummation of the transactions contemplated therein: (i) will contravene any provision of any applicable Legal Requirement or Governmental Authority, domestic or foreign, applicable to such Pledgor; (ii) will conflict or be inconsistent with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Collateral Documents and Permitted Liens) upon any of the properties or assets of such Pledgor or any of its Subsidiaries pursuant to the terms of any indenture, lease, mortgage, deed of trust, credit agreement, loan agreement or any other material agreement, contract or other instrument to which such Pledgor or any of its Subsidiaries is a party or is otherwise bound, or by which it or any of its properties or assets is bound or to which it may be subject; or (iii) will violate any provision of the organizational documents of such Pledgor or any of its Subsidiaries;
(vi) all of such Pledgor’s Collateral (consisting of Securities, Limited Liability Company Interests and Partnership Interests) has been duly and validly issued, is fully paid and non-assessable and is subject to no options to purchase or similar rights;
(vii) each of such Pledgor’s Pledged Notes constitutes, or when executed by the obligor thereof will constitute, the legal, valid and binding obligation of such obligor, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law);
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(viii) the pledge, collateral assignment and delivery to the Collateral Agent of such Pledgor’s Collateral consisting of Certificated Securities and Pledged Notes pursuant to this Agreement creates a valid and perfected first priority security interest in such Certificated Securities and Pledged Notes, and the proceeds thereof, subject to no prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien or encumbrance on the property or assets of such Pledgor which would include the Securities (other than, subject to the terms of the First Priority Intercreditor Agreement, the Liens securing the First Lien Obligations) and the Collateral Agent is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfect security interests in respect of such Collateral; and
(ix) “control” (as defined in Section 8-106 of the UCC) has been obtained by the Collateral Agent over all of such Pledgor’s Collateral consisting of Securities (including, without limitation, Notes which are Securities) with respect to which such “control” may be obtained pursuant to Section 8-106 of the UCC, except to the extent that the obligation of the applicable Pledgor to provide the Collateral Agent with “control” of such Collateral has not yet arisen under this Agreement; provided that in the case of the Collateral Agent obtaining “control” over Collateral consisting of a Security Entitlement, such Pledgor shall have taken all steps in its control so that the Collateral Agent obtains “control” over such Security Entitlement.
| (b) | Each Pledgor covenants and agrees that it will defend the Collateral Agent’s right, title and security interest in and to such Pledgor’s Collateral and the proceeds thereof against the claims and demands of all persons whomsoever; and each Pledgor covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Collateral Agent by such Pledgor as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Collateral Agent and the other Notes Secured Parties. |
| (c) | Each Pledgor covenants and agrees that it will take no action which would violate any of the terms of any Indenture Document. |
| 17. | LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION); JURISDICTION OF ORGANIZATION; LOCATION; FEDERAL EMPLOYER IDENTIFICATION NUMBER; CHANGES THERETO; ETC. The exact legal name of each Pledgor, the type of organization of such Pledgor, the Location of such Pledgor and the federal employer identification number of such Pledgor (if any), is listed on Annex C to the Security Agreement. No Pledgor shall change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its jurisdiction of organization, its Location or its federal employer identification number (if any) except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Indenture Documents and so long as same do not involve (x) a Registered Organization ceasing to constitute same or (y) any Pledgor changing its jurisdiction of organization or Location, as the case may be, from the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 5 Business Days’ prior written notice of each change to the information listed on Annex A (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex A which shall correct all information contained therein for such Pledgor, and (ii) in connection with the respective change or changes, it shall have taken all action reasonably necessary or as reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. |
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| 18. | PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever (other than termination of this Agreement pursuant to Section 20 hereof), including, without limitation: |
(i) any renewal, extension, amendment or modification of, or addition or supplement to or deletion from any Indenture Document (other than this Agreement in accordance with its terms), or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof;
(ii) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument including, without limitation, this Agreement (other than a waiver, consent or extension with respect to this Agreement in accordance with its terms);
(iii) any furnishing of any additional security to the Collateral Agent or its assignee or any acceptance thereof or any release of any security by the Collateral Agent or its assignee;
(iv) any limitation on any party’s liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; or
(v) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any Pledgor or any Subsidiary of any Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing.
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| 19. | SALE OF COLLATERAL WITHOUT REGISTRATION. If at any time when the Collateral Agent shall exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests pursuant to Section 7 hereof, and such Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Collateral Agent may sell such Collateral or part thereof by private sale in such manner and under such circumstances as the Collateral Agent may reasonably deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Collateral Agent (i) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under such Securities Act, (ii) may approach and negotiate with a single possible purchaser to effect such sale, and (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Collateral at a price which the Collateral Agent, in its sole and absolute discretion, may in the absence of gross negligence or willful misconduct deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until the registration as aforesaid. |
| 20. | TERMINATION; RELEASE. (a) On the Termination Date, this Agreement and the security interest created hereby shall automatically and irrevocably terminate (provided that all indemnities set forth herein including, without limitation, in Section 11 hereof shall survive any such termination) and the Collateral Agent, at the written request and sole expense of such Pledgor, will execute and deliver to such Pledgor a proper instrument or instruments (including UCC termination statements and control agreement terminations) acknowledging the satisfaction and termination of this Agreement (including, without limitation, UCC termination statements and instruments of satisfaction, discharge and/or reconveyance), and will automatically and irrevocably be released from the security interest created hereby and will promptly assign, transfer and deliver to such Pledgor or its designee on behalf of such Pledgor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any moneys at the time held by the Collateral Agent or any of its sub-agents hereunder and, with respect to any Collateral consisting of an Uncertificated Security, a Partnership Interest or a Limited Liability Company Interest (other than an Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), a termination of the agreement relating thereto executed and delivered by the issuer of such Uncertificated Security pursuant to Section 3.2(a)(ii) or by the respective partnership or limited liability company pursuant to Section 3.2(a)(iv)(2). |
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| (b) | In the event that any part of the Collateral is sold or otherwise disposed of (to a Person other than a Notes Secured Party) at any time prior to the Termination Date, in connection with a sale or disposition permitted by the Indenture or is otherwise released in accordance with the terms of the Indenture Documents and the proceeds of such sale or disposition (or from such release) are applied in accordance with the terms of the Indenture Documents to the extent required to be so applied, the Collateral Agent, at the written request and sole expense of such Pledgor, will duly release from the security interest created hereby (and will execute and deliver such documentation, including termination or partial release statements and the like in connection therewith) and assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or released and as may be in the possession of the Collateral Agent (or, in the case of Collateral held by any sub-agent designated pursuant to Section 4 hereof, such sub-agent) and has not theretofore been released pursuant to this Agreement. At any time that any Pledgor desires that Collateral be released as provided in the foregoing Section 20(a) or (b), it shall deliver to the Collateral Agent (and the relevant sub-agent, if any, designated pursuant to Section 4 hereof) a certificate signed by an authorized officer of such Pledgor certifying that the release of the respective Collateral is permitted pursuant to the Indenture Documents, including Section 20(a) or (b) hereof. |
| (c) | The Collateral Agent shall have no liability whatsoever to any other Notes Secured Party as the result of any release of Collateral by it in accordance with (or which the Collateral Agent in the absence of gross negligence and willful misconduct believes to be in accordance with) this Section 20. |
| 21. | NOTICES, ETC. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by e-mail, mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when e-mailed, mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Collateral Agent or any Pledgor shall not be effective until received by the Collateral Agent or such Pledgor, as the case may be. All notices and other communications shall be in writing and addressed as follows: |
| (a) | if to any Pledgor, at its address set forth in the Security Agreement; |
| (b) | if to the Collateral Agent, at its address set forth in the Security Agreement, |
or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.
| 22. | WAIVER; AMENDMENT. Except as provided in Sections 30 and 32 hereof, none of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever except in accordance with the requirements specified in the Security Agreement and the Indenture. |
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| 23. | SUCCESSORS AND ASSIGNS. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 20 hereof, (ii) be binding upon each Pledgor, its successors and permitted assigns; provided, however, that no Pledgor shall assign any of its rights or obligations hereunder except as may otherwise be permitted by the Indenture Documents, and (iii) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other Notes Secured Parties and their respective successors, transferees and permitted assigns. All agreements, statements, representations and warranties made by each Pledgor herein or in any certificate or other instrument delivered by such Pledgor or on its behalf under this Agreement shall be considered to have been relied upon by the Notes Secured Parties and shall survive the execution and delivery of this Agreement and the other Indenture Documents regardless of any investigation made by the Notes Secured Parties or on their behalf. |
| 24. | HEADINGS DESCRIPTIVE. The headings of the several Sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. |
| 25. | GOVERNING LAW; WAIVER OF JURY TRIAL. Sections 12.07 and 12.15 of the Indenture are hereby incorporated by this reference, mutatis mutandis. |
| 26. | PLEDGOR’S DUTIES. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Pledgor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, except for the safekeeping of Collateral actually in Pledgor’s possession, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Pledgor under or with respect to any Collateral. |
| 27. | COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart hereof by facsimile or electronic transmission shall be effective as delivery of an original executed counterpart hereof. |
| 28. | SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. |
| 29. | RECOURSE. This Agreement is made with full recourse to each Pledgor and pursuant to and upon all the representations, warranties, covenants and agreements on the part of such Pledgor contained herein and in the other Indenture Documents and otherwise in writing in connection herewith or therewith. |
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| 30. | ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of Company that is required to become a party to this Agreement after the date hereof pursuant to the requirements of the Indenture or any other Indenture Document, shall become a Pledgor hereunder by (x) executing a joinder agreement in the form of Annex G hereto and delivering same to the Collateral Agent, (y) delivering supplements to Annexes A through G, hereto as are necessary to cause such annexes to be complete and accurate with respect to such additional Pledgor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken. |
| 31. | LIMITED OBLIGATIONS. It is the desire and intent of each Pledgor and the Notes Secured Parties that this Agreement shall be enforced against each Pledgor to the fullest extent permissible under the laws applied in each jurisdiction in which enforcement is sought. Notwithstanding anything to the contrary contained herein, in furtherance of the foregoing, it is noted that the obligations of each Pledgor constituting a Guarantor have been limited as provided in the Indenture. |
| 32. | RELEASE OF PLEDGORS. If at any time any Pledgor ceases to be a Subsidiary of the Company in a transaction permitted pursuant to the Indenture Documents ((other than upon the basis of such Person ceasing to be a Subsidiary as a result of a transaction with the primary intention to release such Subsidiary from its Guarantee in Article 11 of the Indenture)), then, such Pledgor shall be released as a Pledgor pursuant to this Agreement without any further action hereunder, and the Collateral Agent is authorized and directed, at the sole expense of the Company, to execute and deliver such instruments of release as may be reasonably requested in writing by the Company. At any time that the Company desires that a Pledgor be released from this Agreement as provided in this Section 32, the Company shall deliver to the Collateral Agent a certificate signed by an authorized officer of the Company stating that the release of such Pledgor is permitted pursuant to this Section 32. The Collateral Agent shall have no liability whatsoever to any other Notes Secured Party as a result of the release of any Pledgor by it in accordance with, or which it believes in the absence of gross negligence and willful misconduct to be in accordance with, this Section 32. |
| 33. | RIGHTS AND OBLIGATIONS SUBJECT TO INTERCREDITOR AGREEMENT. Without limiting the generality of Section 1(b): (a) the Liens granted hereunder in favor of the Collateral Agent for the benefit of the Notes Secured Parties in respect of the Collateral and the exercise of any right related thereto thereby shall be subject, in each case, to the terms of the Intercreditor Agreement and (b) notwithstanding anything to the contrary herein, any provision hereof that requires (or any representation or warranty hereunder to the extent that it would have the effect of requiring) any Assignor to (i) deliver any Collateral to the Collateral Agent, or (ii) provide that the Collateral Agent have control over such Collateral (or, in the case of any representation or warranty hereunder, shall be deemed to be true) by (A) with respect to subclause (i) hereof, the delivery of such Collateral by such Assignor to the First Lien Agent for the benefit of the First Lien Creditors and the Notes Secured Parties pursuant to Section 4.7 of the First Priority Intercreditor Agreement, and (B) with respect to subclause (ii) hereof, providing that the First Lien Agent be provided with control with respect to such Collateral of such Assignor for the benefit of the secured parties under the First Priority Collateral Documents and the Notes Secured Parties pursuant to Section 4.7 of the First Priority Intercreditor Agreement. |
| 34. | ANNUAL UPDATE. Each Pledgor agrees that it shall, concurrently with the delivery of annual financial statements pursuant to Section 5.03(1) of the Indenture, furnish to the Collateral Agent, to the extent there are any changes to such Annexes, updated Annexes A through G hereto and be deemed to have made each representation or warranty set forth herein referencing such Annexes as of the date of delivery thereof (rather than the date of this Agreement). |
* * * *
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IN WITNESS WHEREOF, each Pledgor and the Collateral Agent have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written.
| CURO
GROUP HOLDINGS CORP. as the Issuer and a Pledgor |
||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
| CURO FINANCIAL TECHNOLOGIES CORP. | ||
| CURO INTERMEDIATE HOLDINGS CORP. | ||
| CURO MANAGEMENT LLC | ||
| SOUTHERNCO, INC. | ||
| FIRST HERITAGE CREDIT, LLC | ||
| FIRST HERITAGE CREDIT OF ALABAMA, LLC | ||
| FIRST HERITAGE CREDIT OF LOUISIANA, LLC | ||
| FIRST HERITAGE CREDIT OF MISSISSIPPI, LLC | ||
| FIRST HERITAGE CREDIT OF SOUTH CAROLINA, LLC | ||
| FIRST HERITAGE CREDIT OF TENNESSEE, LLC | ||
| each as a Pledgor | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
[Signature Page to Pledge Agreement]
| CURO VENTURES, LLC | ||
| ATTAIN FINANCE, LLC | ||
| AD ASTRA RECOVERY SERVICES, INC. | ||
| CURO COLLATERAL SUB, LLC | ||
| CURO CREDIT, LLC | ||
| SOUTHERN FINANCE OF SOUTH CAROLINA, INC. | ||
| SOUTHERN FINANCE OF TENNESSEE, INC. | ||
| COVINGTON CREDIT, INC. | ||
| COVINGTON CREDIT OF GEORGIA, INC. | ||
| COVINGTON CREDIT OF ALABAMA, INC. | ||
| COVINGTON CREDIT OF TEXAS, INC. | ||
| HEIGHTS FINANCE HOLDING CO. | ||
| HEIGHTS FINANCE CORPORATION, an Illinois corporation | ||
| HEIGHTS FINANCE CORPORATION, a Tennessee corporation | ||
| QUICK CREDIT CORPORATION | ||
| each as a Pledgor | ||
| By: | /s/ Gary L. Fulk | |
| Name: | Gary L. Fulk | |
| Title: | President | |
[Signature Page to Pledge Agreement]
| ENNOBLE FINANCE, LLC | ||
| as a Pledgor | ||
| By: | Curo Intermediate Holdings Corp. | |
| Its: | Sole Member | |
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
[Signature Page to Pledge Agreement]
Accepted and Agreed to:
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, | ||
| As Collateral Agent | ||
| By: | /s/ Christopher J. Grell | |
| Name: | Christopher J. Grell | |
| Title: | Vice President | |
[Signature Page to Pledge Agreement]
Exhibit 10.7
Execution Version
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this “Intercreditor Agreement”), dated as of May 15, 2023, is by and among ALTER DOMUS (US) LLC, as collateral agent under the First Lien Credit Agreement (as hereinafter defined), for itself and the other First Lien Creditors (as hereinafter defined), U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as collateral agent under the 1.5 Lien Indenture (as hereinafter defined), for itself and the other 1.5 Lien Creditors (as hereinafter defined) (together with its successors and assigns, in such capacity, “1.5 Lien Agent”), and TMI TRUST COMPANY, as collateral agent under the Second Lien Indenture (as hereinafter defined), for itself and the other Second Lien Creditors (as hereinafter defined) (together with its successors and assigns, in such capacity, “Second Lien Agent”).
RECITALS:
Article I. First Lien Agent and the other First Lien Creditors have entered into one or more financing arrangements with Borrower (as hereinafter defined), pursuant to which the First Lien Lenders have made and may, upon certain terms and conditions, continue to make loans and provide other financial accommodations to Borrower secured by liens on and security interests in substantially all of the assets and properties of Borrower and the other Obligors (as defined herein).
Article II. The Issuer (as hereinafter defined), the other Obligors named therein and U.S. Bank Trust Company, National Association, as trustee and collateral agent, have entered into the 1.5 Lien Indenture, pursuant to which Issuer has issued, and the 1.5 Lien Noteholders have purchased, the 1.5 Lien Notes (as hereinafter defined), which 1.5 Lien Notes are secured by liens on and security interests in substantially all of the assets and properties of the Issuer and the other Obligors.
Article III. The Issuer, the other Obligors named therein and TMI Trust Company, as trustee and collateral agent, have entered into the Second Lien Indenture, pursuant to which Issuer has issued, and the Second Lien Noteholders have purchased, the Second Lien Notes (as hereinafter defined), which Second Lien Notes are secured by liens on and security interests in substantially all of the assets and properties of the Issuer and the other Obligors.
Article IV. First Lien Agent, the Borrower and the other Obligors have entered into the First Lien Credit Agreement (as hereinafter defined).
Article V. First Lien Agent, on behalf of itself and the other First Lien Creditors, 1.5 Lien Agent, on behalf of itself and the other 1.5 Lien Creditors, and Second Lien Agent, on behalf of itself and the other Second Lien Creditors, enter into this Intercreditor Agreement to (i) confirm the relative priorities of the Liens (as defined herein) of First Lien Agent, on behalf of itself and the First Lien Creditors, 1.5 Lien Agent, on behalf of itself and the other 1.5 Lien Creditors, and Second Lien Agent, on behalf of itself and the other Second Lien Creditors, in the assets and properties of Borrower and the other Obligors, and (ii) provide for the orderly sharing among them, in accordance with such priorities, of the proceeds of such assets and properties upon any foreclosure thereon or other disposition thereof.
In consideration of the mutual benefits accruing to First Lien Agent, the other First Lien Creditors, 1.5 Lien Agent, the other 1.5 Lien Creditors, Second Lien Agent and the other Second Lien Creditors hereunder and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:
| 1. | DEFINITIONS |
As used above and in this Intercreditor Agreement, the following terms shall have the meanings ascribed to them below:
| 1. | “1.5 Lien Agent” shall mean U.S. Bank Trust Company, National Association, in its capacity as collateral agent for itself and the other 1.5 Lien Creditors under the 1.5 Lien Indenture, and its successors and assigns. |
| 2. | “1.5 Lien Creditors” shall mean, collectively, the 1.5 Lien Notes Secured Parties and the applicable Pari Passu Indebtedness Secured Parties, if any. |
| 3. | “1.5 Lien Documents” shall mean, collectively, the 1.5 Lien Indenture Documents and the applicable Pari Passu Payment Lien Documents, if any. |
| 4. | “1.5 Lien Obligations” shall mean, collectively, the 1.5 Lien Indenture Obligations and the applicable Pari Passu Payment Lien Obligations, if any. |
| 5. | “1.5 Lien Indenture” shall mean the Indenture, dated as of May 15, 2023, among the Issuer, the other Obligors named therein, 1.5 Lien Agent and 1.5 Lien Trustee, as the same now exists or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated in accordance with the terms of this Intercreditor Agreement. |
| 6. | “1.5 Lien Indenture Documents” shall mean the 1.5 Lien Indenture, the 1.5 Lien Notes and all agreements, documents, collateral documents, guaranties and instruments at any time executed and/or delivered by the Issuer or any other Obligor with, to or in favor of the 1.5 Lien Creditors in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise). |
| 7. | “1.5 Lien Indenture Obligations” shall mean all obligations, liabilities and indebtedness of every kind, nature and description owing by the Issuer or any other Obligor to the 1.5 Lien Notes Secured Parties evidenced by or arising under the 1.5 Lien Indenture Documents, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, including, without limitation, principal, interest, premium, if any, charges, fees, costs, indemnities and expenses (including, without limitation, attorneys’ and consultant fees and expenses), however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the 1.5 Lien Indenture Documents or after the commencement of any Insolvency Proceeding with respect to the Issuer or any other Obligor (and including, without limitation, the payment of interest which would accrue and become due but for the commencement of such Insolvency Proceeding, whether or not such interest is allowed or allowable in whole or in part in any such Insolvency Proceeding), and in each case, whether or not allowed or allowable in an Insolvency Proceeding. |
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| 8. | “1.5 Lien Noteholders” shall mean holders of the 1.5 Lien Notes at any time and from time to time and their respective successors and assigns (including any other creditor or group of creditors that at any time succeeds to or refinances, replaces or substitutes for all or any portion of the 1.5 Lien Obligations under the 1.5 Lien Indenture Documents at any time from time to time (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise)). |
| 9. | “1.5 Lien Notes” shall mean the Issuer’s 7.500% Senior 1.5 Lien Secured Notes due 2028, issued pursuant to the 1.5 Lien Indenture, as the same may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated in accordance with the terms of this Intercreditor Agreement (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise). |
| 10. | “1.5 Lien Notes Guarantees” shall mean, collectively, the guarantees of the Obligors (other than the Issuer) under the 1.5 Lien Notes and the 1.5 Lien Indenture. |
| 11. | “1.5 Lien Notes Secured Parties” shall mean, collectively, 1.5 Lien Agent, 1.5 Lien Trustee and the holders of the 1.5 Lien Notes, and their successors and assigns. |
| 12. | “1.5 Lien Trustee” shall mean U.S. Bank Trust Company, National Association, in its capacity as Trustee under the 1.5 Lien Indenture and its successors and assigns including each other Person acting in a similar capacity under any 1.5 Lien Indenture. |
| 13. | “Agreements” shall mean, collectively, the First Lien Loan Agreements, 1.5 Lien Documents and the Second Lien Documents. |
| 14. | “Banking Services” shall mean each and any of the following bank services provided to Borrower or any other Obligor by any Cash Management Creditor: (a) commercial credit cards, (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts, netting and interstate depository network services). |
| 15. | “Banking Services Obligations” of Borrower and the other Obligors shall mean any and all obligations of Borrower or the other Obligors, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services. |
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| 16. | “Bankruptcy Law” means any of the U.S. Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and the Winding-Up and Restructuring Act (Canada), each as now and hereafter in effect, any successors to such statutes and any other applicable bankruptcy, insolvency, winding-up, dissolution, restructuring, receivership, arrangement, liquidation, reorganization or similar law of any jurisdiction providing relief from or otherwise affecting the rights of creditors. |
| 17. | “Borrower” shall mean CURO Group Holdings Corp., a Delaware corporation, and its successors and assigns, including, without limitation, any receiver, trustee or debtor-in-possession on its behalf or on behalf of any of its successors or assigns. |
| 18. | “Cash Management Creditor” shall mean (i) any First Lien Lender party to the First Lien Credit Agreement or any Affiliate (as defined in the First Lien Credit Agreement) thereof that provides Banking Services to Borrower or any other Obligor or (ii) any other Person to the extent the obligations of any Obligor to such Person in respect of Banking Services are secured on a pari passu or senior basis relative to the Liens of First Lien Agent securing the obligations under the First Lien Credit Agreement and are permitted to be so secured under each of the Agreements. |
| 19. | “Collateral” shall mean all assets and properties of any kind whatsoever, real or personal, tangible or intangible and wherever located, whether now owned or hereafter acquired, of Borrower or any other Obligor in which a security interest is granted (or purported to be granted) under any of the Agreements. |
| 20. | “Creditors” shall mean, collectively, First Lien Agent, the other First Lien Creditors, 1.5 Lien Agent, 1.5 Lien Trustee, the other 1.5 Lien Creditors, Second Lien Agent, Second Lien Trustee and the other Second Lien Creditors, and their respective successors and assigns, being sometimes referred to herein individually as a “Creditor.” |
| 21. | “Enforcement Action” shall mean the exercise of any rights and remedies in respect of Collateral securing the First Lien Obligations or the Junior Lien Obligations by the applicable Creditor or Creditors including, without limitation, (a) any action by any Creditor to foreclose on the Lien of such Person in any Collateral, (b) any action by any Creditor to take possession of, sell or otherwise realize (judicially or nonjudicially) upon any Collateral (including, without limitation, by setoff or notification of account debtors), and/or (c) the commencement by any Creditor of any legal proceedings against Borrower or any other Obligor or with respect to any Collateral to facilitate the actions described in clauses (a) and (b) above. |
| 22. | “Event of Default” shall mean an “Event of Default” or similar term, as such term is defined in the First Lien Credit Agreement, the 1.5 Lien Indenture, the Second Lien Indenture, or any Pari Passu Payment Lien Document, so long as any such Agreement is in effect. |
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| 23. | “First Lien Agent” shall mean Alter Domus (US) LLC, in its capacities as administrative agent and collateral agent for the First Lien Creditors under the First Lien Credit Agreement, and its successors and assigns acting in a similar capacity under the First Lien Credit Agreement, and shall include any successor “First Lien Agent” designated pursuant to Section 4.3(a). |
| 24. | “First Lien Credit Agreement” shall mean the First Lien Credit Agreement, dated as of May 15, 2023, among the Company, the guarantors from time to time thereto, First Lien Agent and the other First Lien Lenders from time to time party thereto, as the same may be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated (in each case, whether or not upon termination and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities) from time to time in accordance with the terms of this Intercreditor Agreement, and shall include any new “First Lien Credit Agreement” designated pursuant to Section 4.3(a). |
| 25. | “First Lien Creditors” shall mean, collectively, the First Lien Lenders and the applicable Pari Passu Indebtedness Secured Parties, if any. |
| 26. | “First Lien Default” shall mean an Event of Default under the First Lien Credit Agreement or any applicable Pari Passu Payment Lien Document or a “Default” or similar term, as such term is defined in the First Lien Credit Agreement or any applicable Pari Passu Payment Lien Document. |
| 27. | “First Lien Lenders” shall mean, collectively, (i) First Lien Agent, (ii) each lender now or hereafter party to the First Lien Credit Agreement from time to time, (iii) all Hedging Creditors, (iv) all Cash Management Creditors, and (v) in each case in respect of preceding clauses (i) through (iv), their respective successors and assigns, and shall include any new “First Lien Lenders” designated pursuant to Section 4.3(a). |
| 28. | “First Lien Loan Agreements” shall mean, collectively, (i) the First Lien Credit Agreement, (ii) all agreements, confirmations and other documents entered into or evidencing any Hedging Transaction, (iii) all agreements and other documents entered into or evidencing any Banking Services, (iv) all other agreements, documents, notes, guaranties, collateral documents and instruments at any time executed and/or delivered by Borrower or any other Obligor with, to or in favor of First Lien Agent and/or the First Lien Creditors in connection therewith or related thereto, including all “Facility Documents” or any similar term as defined in the First Lien Credit Agreement, (v) this Agreement, and (vi) the applicable Pari Passu Payment Lien Documents, if any, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated from time to time (in each case, whether or not upon termination and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities), and shall include any new “First Lien Loan Agreement” designated pursuant to Section 4.3(a). |
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| 29. | “First Lien Obligations” shall mean (i) any and all obligations, liabilities and indebtedness of every kind, nature and description owing by Borrower or any other Obligor (including, without limitation, Hedging Obligations and Banking Services Obligations) to First Lien Agent and the other First Lien Lenders evidenced by or arising under any of the First Lien Loan Agreements, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, including (without limitation) principal, premium, interest, reimbursement, obligations, charges, fees, obligations to post cash collateral, costs, indemnities and expenses (including, without limitation, attorneys’ and consultant fees and expenses), however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of any of the First Lien Loan Agreements or after the commencement of any Insolvency Proceeding with respect to Borrower or any other Obligor (and including, without limitation, the payment of interest, fees and expenses which would accrue and become due but for the commencement of such Insolvency Proceeding at the applicable rate provided for in the respective First Lien Loan Agreements, whether or not such interest, fees or expenses is allowed or allowable in whole or in part in any such Insolvency Proceeding), and in each case, whether or not allowed or allowable in an Insolvency Proceeding, and (ii) any applicable Pari Passu Payment Lien Obligations. The term “First Lien Obligations” shall include obligations consisting of interest and fees, costs or expenses, in each case whether or not charged by First Lien Agent and/or the other First Lien Creditors to any loan account of Borrower maintained by First Lien Agent pursuant to the First Lien Credit Agreement. |
| 30. | “Hedging Creditor” shall mean any (i) First Lien Lender party to the First Lien Credit Agreement or any Affiliate (as defined in the First Lien Credit Agreement) thereof, including any First Lien Lender party to the First Lien Credit Agreement or any Affiliate thereof at the time that the respective Hedging Transaction was entered into (even if the respective First Lien Lender subsequently ceases to be a First Lien Lender under the First Lien Credit Agreement for any reason) or (ii) any other Person to the extent the obligations of any Obligor to such Person in respect of Hedging Transactions are secured on a pari passu or senior basis relative to the Liens of First Lien Agent securing the obligations under the First Lien Credit Agreement and are permitted to be so secured under each of the Agreements. |
| 31. | “Hedging Obligations” of Borrower or any other Obligor shall mean any and all obligations of such Obligor, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Hedging Transactions, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Transactions. |
| 32. | “Hedging Transaction” shall mean any transaction (including an agreement with respect thereto) now existing or hereafter entered by Borrower or any other Obligor with a Hedging Creditor which is an interest rate protection agreement, interest rate, swap, cap, collar or floor agreement, foreign currency exchange agreements or other interest rate or currency management device used to manage interest rate risk or exchange rate risk. |
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| 33. | “Insolvency Proceeding” shall mean, with respect to any Person, (a) a case, action or proceeding with respect to such Person (i) before any court or any other Official Body under any bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect (including any Bankruptcy Laws), or (ii) for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of with respect to any Person or otherwise relating to the liquidation, dissolution, winding-up or relief of such Person, (b) any liquidation, dissolution, reorganization or winding up of such Person whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or (c) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of such Person’s creditors generally or any substantial portion of its creditors undertaken under any law. |
| 34. | “Issuer” shall mean CURO Group Holdings Corp., a Delaware corporation, and its successors and assigns, including, without limitation, any receiver, trustee or debtor-in-possession on its behalf or on behalf of any of its successors or assigns. |
| 35. | “Junior Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date hereof, by and between 1.5 Lien Agent and Second Lien Agent. |
| 36. | “Junior Lien Agents” means 1.5 Lien Agent and Second Lien Agent. |
| 37. | “Junior Lien Creditors” means the 1.5 Lien Creditors and the Second Lien Creditors. |
| 38. | “Junior Lien Default” shall mean an Event of Default under the 1.5 Lien Indenture, Second Lien Indenture or any applicable Pari Passu Payment Lien Document or a “Default” or similar term, as such term is defined under the 1.5 Lien Indenture, Second Lien Indenture or any applicable Pari Passu Payment Lien Document. |
| 39. | “Junior Lien Documents” means the 1.5 Lien Documents and the Second Lien Documents. |
| 40. | “Junior Lien Obligations” means the 1.5 Lien Obligations and the Second Lien Obligations. |
| 41. | “Lien” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing). |
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| 42. | “Obligors” shall mean, individually and collectively, any Person liable on or in respect of the Second Lien Obligations, 1.5 Lien Obligations or the First Lien Obligations, and each of their successors and assigns, including, without limitation, a receiver, trustee or debtor-in-possession on behalf of such person or on behalf of any such successor or assign. |
| 43. | “Official Body” shall mean any national, Federal, state, local or other government or political subdivision or any agency, authority, board, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. |
| 44. | “Order of Payment” shall mean, in connection with (i) the application, payment or distribution of proceeds of any Collateral or any proceeds of any Collateral pursuant to any Enforcement Action or otherwise following the occurrence and during the pendency of an Event of Default, (ii) any distribution of or in respect of any Collateral or on account of any claim secured by any Collateral (whether or not expressly characterized as such) upon or in any Insolvency Proceeding with respect to Borrower or any other Obligor, or (iii) any distribution of Collateral (or proceeds thereof) upon the liquidation or dissolution of Borrower or any other Obligor, the following order for such application: (i) first, ratably to pay all First Lien Obligations in such order as specified in the relevant First Lien Loan Agreements until all First Lien Obligations have been paid in full in cash (including on account of interest accrued after the commencement of an Insolvency Proceeding, whether or not allowed in such proceeding, and including amounts paid to be held by First Lien Agent and/or the First Lien Creditors as cash collateral in such amounts as First Lien Agent determines is reasonably necessary to secure the First Lien Creditors in connection with (x) any issued and outstanding letters of credit under the First Lien Credit Agreement but not in any event in an amount greater than 105% of the aggregate undrawn face amount of such letters of credit constituting First Lien Obligations, and (y) any Hedging Obligations and Banking Services Obligations); (ii) second, subject to the Junior Intercreditor Agreement and any other applicable Agreement, ratably to pay any Junior Lien Obligations in such order as specified in the relevant Agreements, until paid in full and (ii) third, to the Obligors or any other creditor thereof, as their interests may appear. |
| 45. | “Pari Passu Indebtedness” shall mean any indebtedness (1) that is permitted to be incurred and secured by all or a portion of the Collateral under each of the Agreements and (2) that is permitted under each of the Agreements to be secured on a pari passu basis with the First Lien Obligations, the 1.5 Lien Obligations or the Second Lien Obligations; provided that (i) such Indebtedness is so designated as Pari Passu Indebtedness in an officers’ certificate delivered to First Lien Agent, 1.5 Lien Agent and Second Lien Agent and (ii) the Issuer and an authorized representative of the holders of such Indebtedness shall have executed and delivered a Supplement. For the avoidance of doubt, Pari Passu Indebtedness shall constitute one, but only one of, First Lien Obligations, 1.5 Lien Obligations or Second Lien Obligations hereunder, as set forth in the applicable Supplement. |
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| 46. | “Pari Passu Indebtedness Secured Parties” shall mean, collectively, the agent, the trustee or other representative, if any (and their respective successors and assigns), and the holders of Pari Passu Indebtedness identified in a Supplement. |
| 47. | “Pari Passu Payment Lien Documents” shall mean any loan agreement, indenture or other instrument that evidences or governs any Pari Passu Indebtedness. |
| 48. | “Pari Passu Payment Lien Obligations” shall mean all obligations (including interest that accrues after the commencement of an insolvency or bankruptcy case, regardless of whether such interest is an allowed claim under such case) outstanding under the Pari Passu Payment Lien Documents. |
| 49. | “Person” or “person” shall mean any individual, sole proprietorship, partnership, corporation (including without limitation, any corporation which elects subchapter S status under the Internal Revenue Code of 1986, as amended), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock company, trust, joint venture, or other entity or any government or any agency or instrumentality or political subdivision thereof. |
| 50. | “Required Lenders” shall mean the “Required Lenders” or any similar term as defined in the First Lien Credit Agreement. |
| 51. | “Second Lien Agent” shall mean TMI Trust Company, in its capacity as collateral agent for itself and the other Second Lien Creditors under the Second Lien Indenture, and its successors and assigns. |
| 52. | “Second Lien Creditors” shall mean, collectively, the Second Lien Notes Secured Parties and the applicable Pari Passu Indebtedness Secured Parties, if any. |
| 53. | “Second Lien Documents” shall mean, collectively, the Second Lien Indenture Documents and the applicable Pari Passu Payment Lien Documents, if any. |
| 54. | “Second Lien Indenture” shall mean the Indenture, dated as of July 30, 2021, among the Issuer, the other Obligors named therein, Second Lien Agent and Second Lien Trustee, as the same now exists or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated in accordance with the terms of this Intercreditor Agreement. |
| 55. | “Second Lien Indenture Documents” shall mean the Second Lien Indenture, the Second Lien Notes, this Agreement, the Junior Intercreditor Agreement and all agreements, documents, collateral documents, guaranties and instruments at any time executed and/or delivered by the Issuer or any other Obligor with, to or in favor of the Second Lien Creditors in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise). |
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| 56. | “Second Lien Indenture Obligations” shall mean all obligations, liabilities and indebtedness of every kind, nature and description owing by the Issuer or any other Obligor to the Second Lien Notes Secured Parties evidenced by or arising under the Second Lien Indenture Documents, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, including, without limitation, principal, interest, premium, if any, charges, fees, costs, indemnities and expenses (including, without limitation, attorneys’ and consultant fees and expenses), however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Second Lien Indenture Documents or after the commencement of any Insolvency Proceeding with respect to the Issuer or any other Obligor (and including, without limitation, the payment of interest which would accrue and become due but for the commencement of such Insolvency Proceeding, whether or not such interest is allowed or allowable in whole or in part in any such Insolvency Proceeding), and in each case, whether or not allowed or allowable in an Insolvency Proceeding. |
| 57. | “Second Lien Noteholders” shall mean holders of the Second Lien Notes at any time and from time to time and their respective successors and assigns (including any other creditor or group of creditors that at any time succeeds to or refinances, replaces or substitutes for all or any portion of the Second Lien Obligations under the Second Lien Indenture Documents at any time from time to time (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise)). |
| 58. | “Second Lien Notes” shall mean the Issuer’s 7.500% Senior Secured Notes due 2028, issued pursuant to the Second Lien Indenture, as the same may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated in accordance with the terms of this Intercreditor Agreement (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise). |
| 59. | “Second Lien Notes Guarantees” shall mean, collectively, the guarantees of the Obligors (other than the Issuer) under the Second Lien Notes and the Second Lien Indenture. |
| 60. | “Second Lien Notes Secured Parties” shall mean, collectively, Second Lien Agent, Second Lien Trustee and the holders of the Second Lien Notes, and their successors and assigns. |
| 61. | “Second Lien Obligations” shall mean, collectively, the Second Lien Indenture Obligations and the applicable Pari Passu Payment Lien Obligations, if any. |
| 62. | “Second Lien Trustee” shall mean TMI Trust Company, in its capacity as Trustee under the Second Lien Indenture and its successors and assigns including each other Person acting in a similar capacity under any Second Lien Indenture. |
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| 63. | “Standstill Period” shall have the meaning specified in Section 2.10 hereof. |
| 64. | “Supplement” shall have the meaning specified in Section 4.6 hereof. |
| 65. | “UCC” shall mean the Uniform Commercial Code, as amended and in effect in any applicable jurisdiction. |
| 66. | “U.S. Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, any successor statute. |
| 67. | All terms defined in the UCC as in effect in the State of New York, unless otherwise defined herein shall have the meanings set forth therein. All references to any term in the plural shall include the singular and all references to any term in the singular shall include the plural. |
| 2. | PAYMENTS; SECURITY INTERESTS; PRIORITIES; REMEDIES |
| 1. | First Lien Agent and the other First Lien Creditors hereby acknowledge that Second Lien Agent, for its own benefit and for the benefit of the other Second Lien Creditors, and 1.5 Lien Agent, for its own benefit and for the benefit of the other 1.5 Lien Creditors, has been granted Liens upon all of the Collateral pursuant to the Second Lien Documents to secure the Second Lien Obligations and the 1.5 Lien Documents to secure the 1.5 Lien Obligations, respectively. Second Lien Agent on behalf of itself and the other Second Lien Creditors and 1.5 Lien Agent on behalf of itself and the other 1.5 Lien Creditors hereby acknowledge that First Lien Agent, for the benefit of the First Lien Creditors, has been granted Liens upon all of the Collateral pursuant to the First Lien Loan Agreements to secure the First Lien Obligations. |
| 2. | (a) Notwithstanding the date, order or time of attachment, or the date, order, time or manner of perfection, or the date, order or time of filing or recordation of any document or instrument, or other method of perfecting a Lien in favor of each Creditor in any Collateral, and notwithstanding any conflicting terms or conditions which may be contained in any of the Agreements and notwithstanding any provision of the UCC or any other applicable law or any other circumstance whatsoever (including any non-perfection or non-validity or unenforceability of any Lien purporting to secure the First Lien Obligations or the Junior Lien Obligations), any Lien securing First Lien Obligations now or hereafter held by or on behalf First Lien Agent or the other First Lien Creditors or any agent or trustee therefore, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, will have priority over and be senior in all respects to the Liens securing the Junior Lien Obligations (and the Liens securing the Junior Lien Obligations will be junior and subordinate to the Liens securing the First Lien Obligations). All Liens on the Collateral securing any First Lien Obligations shall be and remain senior in all respects and prior to all Liens on the Collateral securing any Junior Lien Obligations for all purposes, whether or not such Lien securing any First Lien Obligations are subordinated to any Lien securing any other obligation of any Obligor or any other Person. The parties hereto acknowledge and agree that it is their intent that the First Lien Obligations (and the security therefor) constitute a separate and distinct class (and separate and distinct claims) from the Junior Lien Obligations (and the security therefor). |
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| 1. | Each of First Lien Agent, for itself and on behalf of the other First Lien Creditors, and each Junior Lien Agent, for itself and on behalf of the applicable Junior Lien Creditors, agrees that it will not, and hereby waives any right to, contest or support any other Person in contesting, in any proceeding (including any Insolvency Proceeding), the priority, perfection, validity or enforceability of any Lien in the Collateral of First Lien Agent, 1.5 Lien Agent or Second Lien Agent, as the case may be; provided that nothing in this Intercreditor Agreement shall be construed to prevent or impair the rights of First Lien Agent or any other First Lien Creditor to enforce this Intercreditor Agreement. |
| 2. | The parties hereto agree that, so long as the First Lien Obligations have not been paid in full in cash, none of Borrower nor any other Obligor shall, nor shall any such Person permit any of its subsidiaries to, (i) unless waived in writing by First Lien Agent, grant or permit any additional Liens on any asset to secure the Junior Lien Obligations (or any of them) unless it has granted, or concurrently therewith grants, a Lien on such asset to secure the First Lien Obligations or (ii) unless waived in writing by 1.5 Lien Agent or otherwise permitted by the 1.5 Lien Indenture or waived in writing by Second Lien Agent or otherwise permitted by the Second Lien Indenture, as applicable, grant or permit any additional Liens on any asset to secure any First Lien Obligations unless it has granted, or concurrently therewith grants, a Lien on such asset to secure the Junior Lien Obligations, with each such Lien to be subject to the provisions of this Intercreditor Agreement. To the extent that the provisions of this paragraph (c) are not complied with for any reason, without limiting any other right or remedy available to First Lien Agent or the other First Lien Creditors, each Junior Lien Agent agrees, for itself and on behalf of the applicable Junior Lien Creditors, that any amounts received by or distributed to any Junior Lien Creditors pursuant to or as a result of any Lien granted in contravention of this Section 2.2(c) shall be subject to Section 2.4 hereof. |
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| 3. | The parties hereto acknowledge and agree that it is their intention that the Collateral securing the First Lien Obligations and 1.5 Lien Obligations be identical, and that there is no Collateral securing the Junior Lien Obligations that does not also secure the First Lien Obligations and the 1.5 Lien Obligations. In furtherance of the foregoing, the parties hereto agree: |
| 1. | to cooperate in good faith in order to determine, upon any reasonable request by First Lien Agent or a Junior Lien Agent, the specific assets included in the Collateral, the steps required to be taken to perfect the Liens of First Lien Agent or a Junior Lien Agent thereon and the identity of the respective parties obligated under the First Lien Loan Agreements and the Junior Lien Documents in respect of the First Lien Obligations and the Junior Lien Obligations, respectively; |
| 2. | that, except to the extent otherwise agreed to by First Lien Agent, the documents, agreements and instruments creating or evidencing the Collateral securing the Junior Lien Obligations and the Liens of the Junior Lien Agents shall be in all respects in the same form as the documents, agreements and instruments creating or evidencing the Collateral securing the First Lien Obligations and the Liens of First Lien Agent, other than with respect to the first priority and junior priority nature of the Liens created or evidenced thereunder, the identity of the secured parties that are parties thereto or secured thereby and other matters contemplated by this Intercreditor Agreement; and |
| 3. | that it will not obtain “control” (as defined in the UCC in effect in the State of New York) of any deposit account or securities account maintained by Borrower or any other Obligor (other than a deposit account maintained with First Lien Agent) or file any UCC financing statement against Borrower or any other Obligor after the date hereof without giving Junior Lien Agents or First Lien Agent, as the case may be, prior written notice of its intention to do so. For the avoidance of doubt, this Section 2.2(d) shall not require the creation of a security interest in favor of the Second Lien Agent or Second Lien Creditors in any assets expressly designated as “Excluded Assets” or a similar term under the Second Lien Documents. |
| 3. | The priorities of the Liens provided in Section 2.2 hereof shall not be altered or otherwise affected by (a) any amendment, modification, supplement, extension, renewal, restatement, replacement or refinancing of the First Lien Obligations or the Junior Lien Obligations, nor (b) any action or inaction which any of the Creditors may take or fail to take in respect of the Collateral. |
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| 4. | Prior to the payment in full in cash of the First Lien Obligations, (i) all Collateral and all proceeds of the Collateral realized pursuant to any Enforcement Action by any Person or otherwise distributed or paid by any Obligor to any Creditor following the occurrence and during the pendency of an Event of Default, (ii) any distribution of or in respect of any Collateral or on account of any claim secured by any Collateral (whether or not expressly characterized as such) upon or in any Insolvency Proceeding with respect to Borrower or any other Obligor, and (iii) any distribution of Collateral (or proceeds thereof) upon the liquidation or dissolution of Borrower or any other Obligor, shall be payable to First Lien Agent on behalf of the First Lien Creditors and, to the extent received by a Junior Lien Agent or any of the other Junior Lien Creditors, shall be segregated from the other funds and property of such Junior Lien Agent or such Junior Lien Creditor, as the case may be, and received and held in trust by such Junior Lien Agent or such Junior Lien Creditor, as the case may be, as trustee, and shall be forthwith paid over, in the funds and currency received, to First Lien Agent for application to the First Lien Obligations. For the avoidance of doubt, the foregoing turnover provision shall apply to all Collateral and all proceeds of Collateral (including all cash removed from any Obligor’s premises or accounts) received by or on behalf of a Junior Lien Agent or any other Junior Lien Creditor in connection with any Enforcement Action taken by a Junior Lien Agent or any other Junior Lien Creditor following the expiration of the Standstill Period notwithstanding anything to the contrary in Section 2.10 hereof. All proceeds of the Collateral received by First Lien Agent or the other First Lien Creditors after the First Lien Obligations have been paid in full in cash shall be forthwith paid over, in the funds and currency received, to 1.5 Lien Agent for application to the 1.5 Lien Obligations (unless otherwise required by law). |
| 5. | The foregoing provisions of this Intercreditor Agreement are intended solely to govern the respective Lien priorities as between the Creditors and shall not impose on any Creditor any obligations in respect of the disposition of proceeds of any Collateral which would conflict with prior perfected claims therein in favor of any other person or any order or decree of any court or governmental authority or any applicable law. |
| 6. | In the event that First Lien Agent, the other First Lien Creditors, a Junior Lien Agent or the other Junior Lien Creditors shall, in the exercise of their rights under their Agreements or otherwise, receive possession or control of any books and records of Borrower or any other Obligor which contain information identifying or pertaining to any Collateral in which First Lien Agent, the other First Lien Creditors, Junior Lien Agent or the other Junior Lien Creditors (as the case may be) has been granted a Lien, such Person shall notify such other Person that they have received such books and records and shall, as promptly as practicable thereafter, make available to such other Person (at the expense of Borrower and the other Obligors) such books and records for inspection and duplication. |
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| 7. | Subject to the terms and conditions set forth in this Intercreditor Agreement, First Lien Agent and the other First Lien Creditors shall have the exclusive right to manage, perform and enforce the terms of the First Lien Loan Agreements with respect to the Collateral, to exercise and enforce all privileges and rights thereunder according to their discretion and the exercise of their business judgment, including, without limitation, the exclusive right to take or retake control or possession of such Collateral and to hold, prepare for sale, process, sell, lease, dispose of, or liquidate such Collateral and to appoint an agent in connection with the foregoing, and to incur expenses in connection with such sale, lease or other disposition and to exercise all of the rights and remedies of a secured creditor under the UCC of any applicable jurisdiction or other applicable law (including, without limitation, any Bankruptcy Law). In exercising rights and remedies with respect to the Collateral, First Lien Agent and the other First Lien Creditors may enforce the provisions of the First Lien Loan Agreements and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their discretion. In furtherance of the foregoing, each Junior Lien Agent, for itself and on behalf of the applicable Junior Lien Creditors, agrees that, subject to the terms and conditions of this Intercreditor Agreement (including, without limitation, Section 2.10 hereof), neither a Junior Lien Agent nor any other Junior Lien Creditor will (i) enforce or exercise, or seek to enforce or exercise, any rights or remedies with respect to any Collateral (including, without limitation, the exercise of any right of set-off or under any lockbox agreement, control account agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which a Junior Lien Agent or any Junior Lien Creditor is a party) or institute or commence, or join with any Person in commencing, any action or proceeding with respect to such rights or remedies (including any action of foreclosure, enforcement, collection or execution and any Insolvency Proceeding), (ii) contest, protest or object to any foreclosure action or proceeding brought by First Lien Agent or any other enforcement or exercise by any First Lien Creditor of any rights or remedies relating to the Collateral so long as Liens of the Junior Lien Creditors attach to the proceeds thereof, subject to the relative priorities provided for in this Intercreditor Agreement, or (iii) object to the forbearance by any First Lien Creditor from commencing or pursuing any foreclosure action or proceeding or any other enforcement or exercise of any rights or remedies. In connection with taking any Enforcement Action against the Collateral (including without limitation any public or private sale under the UCC), First Lien Agent shall give each Junior Lien Agent such reasonable notice of such sale as may be required under the applicable UCC; provided, however, that, subject to Section 3.5 hereof, 10 days’ notice shall be deemed in all respects to be commercially reasonable notice. |
| 8. | Notwithstanding anything to the contrary contained in any of the Agreements, but subject to Section 2.9 below and Section 2.10 below, prior to the time when First Lien Agent and the other First Lien Creditors shall have received payment in full of all First Lien Obligations in cash, whether or not an Insolvency Proceeding has been commenced by or against Borrower or any other Obligor, during the continuance of an Event of Default, only the First Lien Creditors shall have the right to restrict or permit, or approve or disapprove, the sale, transfer or other disposition of, or otherwise deal with, the Collateral or to take and continue any Enforcement Action with respect to the Collateral. |
| 9. | (a) Prior to the existence of an Event of Default, upon any release, sale or disposition of Collateral permitted pursuant to the terms of the First Lien Loan Agreements and the Junior Lien Documents that results in the release of the Lien of First Lien Agent and the other First Lien Creditors in any Collateral, the Liens of the Junior Lien Agents and the other Junior Lien Creditors shall be automatically and unconditionally released with no further consent or action of any Person. Each Junior Lien Agent shall, at the expense of the Obligors, promptly execute and deliver such release documents as First Lien Agent may upon written request reasonably require in connection with any such release, sale or disposition of Collateral. |
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| 1. | Each Junior Lien Agent shall, at any time during the continuance of an Event of Default, at the expense of the Obligors: |
| 1. | upon the written request of First Lien Agent with respect to the Collateral identified in such request as set forth below (which request shall specify the proposed terms of the sale and the type and amount of consideration to be received in connection therewith), subject to clause (ii) below, release or otherwise terminate its Liens on such Collateral, to the extent such Collateral is to be sold or otherwise disposed of either by First Lien Agent or its agents; |
| 2. | deliver such release documents as First Lien Agent may reasonably require in connection therewith; provided, that, |
| 1. | First Lien Agent shall promptly apply any such proceeds as specified in the Order of Payment until the First Lien Obligations have been paid in full in cash, |
| 2. | if any such sale or disposition results in a surplus after application of the proceeds in the Order of Payment to the First Lien Obligations, such surplus shall be paid to 1.5 Lien Agent for the prompt application to the 1.5 Lien Obligations until the 1.5 Lien Obligations have been paid in full in cash; |
| 3. | if any surplus shall remain after the application to the 1.5 Lien Obligations pursuant to preceding clause (B), such surplus shall be applied to the Second Lien Obligations; and |
| 4. | if the closing of the sale or disposition of such Collateral is not consummated, First Lien Agent shall promptly return all release documents to the applicable Junior Lien Agent for the benefit of the applicable Junior Lien Creditors. |
| 2. | Each Junior Lien Agent and the other Junior Lien Creditors shall be deemed, in all cases, to have consented under the Agreements to such sale or other disposition of Collateral described in Sections 2.9(a) and (b) above. In furtherance of the foregoing, each Junior Lien Agent, for itself and on behalf of the applicable Junior Lien Creditors, hereby irrevocably constitutes and appoints First Lien Agent and any officer or agent of First Lien Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Junior Lien Agent or such other Junior Lien Creditor or in First Lien Agent’s own name, from time to time in First Lien Agent’s discretion, for the purpose of carrying out the terms of this clause (c) and clauses (b)(i) and (ii) above, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of such clauses, including any endorsements or other instruments of transfer or release. |
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| 10. | Except as specifically provided in Section 2.11 below, notwithstanding any rights or remedies available to the applicable Junior Lien Agent or the other Junior Lien Creditors under any of the Junior Lien Documents, applicable law or otherwise, prior to the time that First Lien Agent and the other First Lien Creditors shall have received the payment in full of all First Lien Obligations in cash, neither any Junior Lien Agent nor any of the other Junior Lien Creditors shall, directly or indirectly, take any Enforcement Action with respect to any of the Collateral; provided, however, commencing on the 151st day after receipt by First Lien Agent of any Junior Lien Agent’s written declaration of a Junior Lien Default which constitutes an “Event of Default” and written demand by a Junior Lien Agent to Issuer for the accelerated payment of the applicable Junior Lien Obligations (the “Standstill Period”; provided, the Standstill Period shall be tolled during any period during which First Lien Agent is stayed from pursuing Enforcement Actions against the Collateral, whether because Issuer or any other Obligor is subject to an Insolvency Proceeding or otherwise), any Junior Lien Agent or the other Junior Lien Creditors may take action to enforce their Liens on the Collateral, but only so long as First Lien Agent and/or the First Lien Creditors are not pursuing in a commercially reasonable manner the exercise of their enforcement rights or remedies against all or a material portion of the Collateral (including, without limitation, commencement of any action to foreclose its Liens on all or any material portion of the Collateral, notification of account debtors to make payments to First Lien Agent, any action to take possession of all or any material portion of the Collateral or commencement of any legal proceedings or actions against or with respect to all or any material portion of the Collateral) and with any determination of which Collateral to proceed against, and in what order, to be made by First Lien Agent or such First Lien Creditors in their reasonable judgment); provided further that (x) any Collateral or any proceeds of Collateral received by a Junior Lien Agent or such other Junior Lien Creditor, as the case may be, in connection with the enforcement of such Lien shall be applied in accordance with the Order of Payment and (y) First Lien Agent or any other First Lien Creditors may at any time take over such enforcement proceedings from such Junior Lien Agent or the other Junior Lien Creditors so long as First Lien Agent or such First Lien Creditors, as the case may be, pursue enforcement proceedings with respect to all or a material portion of the Collateral in a commercially reasonable manner, with any determination of which Collateral to proceed against, and in what order, to be made by First Lien Agent or such First Lien Creditors in their reasonable judgment, and provided further that the Junior Lien Agents or the other Junior Lien Creditors, as the case may be, shall only be able to recoup any expenses incurred by them in accordance with the priorities set forth in the Order of Payment. In any sale or other disposition of any of the Collateral by a Junior Lien Agent and/or the other Junior Lien Creditors, Junior Lien Agents and/or the other Junior Lien Creditors shall conduct such sale or disposition in a commercially reasonable manner. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all rights and remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under the Bankruptcy Law of any applicable jurisdiction. |
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| 11. | Section 2.10 above shall not be construed to in any way limit or impair the right of: (a) any First Lien Creditor to bid for or purchase Collateral at any private or judicial foreclosure upon such Collateral initiated by any other Creditor, (b) any Junior Lien Creditor to cash bid for or purchase for cash Collateral, in an amount sufficient to pay the First Lien Obligations in full, at any private or judicial foreclosure upon such Collateral initiated by any other Creditor, (c) [reserved], and (d) the Junior Lien Creditors’ right to receive any remaining proceeds of Collateral after satisfaction and payment in full in cash of all First Lien Obligations. |
| 12. | If the First Lien Creditors should honor a request by Borrower for a loan, advance or other financial accommodation under the First Lien Loan Agreements, whether or not the First Lien Creditors have knowledge that the honoring of such request would result in an event of default, or act, condition or event which with notice or passage of time or both would constitute an event of default under the Junior Lien Documents, in no event shall First Lien Agent or the other First Lien Creditors have any liability to any Junior Lien Agent or the other Junior Lien Creditors as a result of such breach, and without limiting the generality of the foregoing, the Junior Lien Agents and the other Junior Lien Creditors agree that neither First Lien Agent nor the First Lien Creditors shall have any liability for tortious interference with contractual relations or for inducement by First Lien Agent or the other First Lien Creditors of Borrower to breach of contract or otherwise. |
| 13. | (a) Unless and until the First Lien Obligations have been satisfied in full, in cash, First Lien Agent and the other First Lien Creditors shall have the sole and exclusive right as among the Creditors, to the extent provided in the First Lien Loan Agreements and subject in all respects to the rights of the Obligors under the First Lien Loan Agreements, to adjust settlement for any insurance policy covering the Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Collateral. Unless and until the First Lien Obligations have been satisfied in full, and subject to the rights of the Obligors under the First Lien Loan Agreements, all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect of the Collateral shall be paid to First Lien Agent for the benefit of the First Lien Creditors pursuant to the terms of the First Lien Loan Agreements. |
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| 14. |
| 1. | The Junior Lien Agents and the other Junior Lien Creditors shall not agree to, without the written consent of First Lien Agent: |
| 1. | make any amendment of the Junior Lien Documents that would shorten the due dates of any principal or interest payments of the Junior Lien Obligations; |
| 2. | increase the interest rate under the Junior Lien Documents by more than 300 basis points (excluding increases resulting from the accrual of interest at the default rate or interest paid-in-kind); or |
| 3. | add to the Collateral securing the Junior Lien Obligations except as permitted by this Intercreditor Agreement. |
| 15. | Each Creditor shall give to the other Creditors concurrently with the giving thereof to Borrower or Issuer, as the case may be, (i) a copy of any written notice by such Creditor of an Event of Default under its respective Agreements with Borrower or Issuer, as the case may be, or written notice of demand of payment from Borrower or Issuer, as the case may be, and (ii) a copy of any written notice sent by such Creditor to Borrower or Issuer, as the case may be, at any time a default under such Creditor’s Agreements with Borrower or Issuer, as the case may be, exists stating such Creditor’s intention to exercise any of its enforcement rights or remedies, including written notice pertaining to any foreclosure on any of the Collateral or other judicial or nonjudicial remedy in respect thereof to the extent permitted hereunder, and any legal process served or filed in connection therewith; provided, that, the failure of any party to give notice as required hereby shall not affect the relative priorities of Creditor’s respective Liens as provided herein or the validity or effectiveness of any such notice as against Borrower or any other Obligor. |
| 16. | In the event that any Junior Lien Default shall have occurred solely as a result of a First Lien Default, and if such First Lien Default shall have been cured by Borrower or any other Obligor or waived by First Lien Agent or the other First Lien Creditors (as applicable), then (i) such Junior Lien Default shall be deemed to be automatically cured by Borrower or such other Obligor or waived by Junior Lien Agent and the other Junior Lien Creditors, as the case may be, and (ii) and any period under Section 2.10 hereof commenced and then existence shall terminate for all purposes hereunder and each Junior Lien Agent and the other Junior Lien Creditors shall cease any remedial actions commenced and then continuing in connection with such Junior Lien Default. |
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| 3. | 1.5 LIEN CREDITOR PURCHASE OPTION |
| 1. | Following the occurrence of (i) written notice by First Lien Agent or the other First Lien Creditors of their intent to accelerate the payment of the First Lien Obligations or to commence any Enforcement Action with respect to any Collateral (or acceleration or the actual commencement of any such Enforcement Action), (ii) the commencement of any Insolvency Proceeding, or (iii) a payment default under the First Lien Loan Agreements which has not been cured or waived by the applicable creditors within 30 days after the occurrence thereof, any 1.5 Lien Creditor shall have the option at any time within 90 days after such occurrence upon five (5) business days’ prior written notice from 1.5 Lien Agent (on behalf of any such 1.5 Lien Creditors) to First Lien Agent to purchase all (but not less than all) of the First Lien Obligations (including any unfunded commitments thereunder and participations in letters of credit, but excluding all Hedging Obligations and Cash Management Obligations) from the First Lien Creditors. Such notice from 1.5 Lien Agent (on behalf of any such 1.5 Lien Creditors) to First Lien Agent shall be irrevocable. In order to effectuate the foregoing, First Lien Agent shall estimate, upon the written request of 1.5 Lien Creditors upon the exercise of such election, the amount in cash that would be necessary to so purchase such First Lien Obligations (assuming the date of the purchase is the date the election was made). The First Lien Obligations shall be purchased among the 1.5 Lien Creditors (other than 1.5 Lien Trustee and 1.5 Lien Agent) giving notice to 1.5 Lien Agent of their intent (which notice shall be irrevocable) to exercise the purchase option hereunder based on the amounts specified therein. |
| 2. | On the date specified by 1.5 Lien Creditors in such notice (which shall not be less than five (5) business days, nor more than thirty (30) days, after the receipt by First Lien Agent of the notice from 1.5 Lien Agent of certain 1.5 Lien Creditors election to exercise such option), the First Lien Creditors shall sell to such 1.5 Lien Creditors electing to purchase, and the 1.5 Lien Creditors electing to purchase shall purchase from the First Lien Creditors, the First Lien Obligations all in accordance with the terms and conditions to be agreed upon directly among First Lien Agent and such 1.5 Lien Creditors that have elected to purchase the First Lien Obligations. The First Lien Creditors hereby represent and warrant that, as of the date hereof, no approval of any court or other regulatory or governmental authority is required for such sale. |
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| 3. | Upon the date of such purchase and sale, the 1.5 Lien Creditors exercising the purchase option in this Section 3 shall (i) pay to the First Lien Creditors as the purchase price therefor the full amount of all the First Lien Obligations then outstanding and unpaid (including principal, premium (prepayment or otherwise, it being understood that any prepayment or acceleration-related premium shall be deemed to have matured and become due and payable upon the exercise by the 1.5 Lien Creditors of their rights under this Section 3 as if the payment of the First Lien Obligations had been accelerated whether or not they actually have been accelerated), interest, fees and expenses, including reasonable attorneys’ fees and legal expenses but excluding any early termination fee payable pursuant to the First Lien Credit Agreement, which amount may be different from the estimate calculated in Section 3.1 above), (ii) furnish cash collateral or back-stop letters of credit to the First Lien Creditors in such amounts as the First Lien Creditors determine is reasonably necessary to secure the First Lien Creditors in connection with any issued and outstanding letters of credit constituting First Lien Obligations provided by First Lien Agent or the other First Lien Creditors (or letters of credit that First Lien Agent or the other First Lien Creditors have arranged to be provided by third parties pursuant to the financing arrangements of the First Lien Creditors with Borrower or any other Obligor constituting First Lien Obligations) to Borrower or any other Obligor (but not in any event in an amount greater than 105% of the aggregate undrawn face amount of such letters of credit), and (iii) agree to reimburse First Lien Agent and the other First Lien Creditors for any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any issued and outstanding letters of credit constituting First Lien Obligations as described above and any checks or other payments provisionally credited to the First Lien Obligations, and/or as to which First Lien Agent or the other First Lien Creditors have not yet received final payment. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account of First Lien Agent (on behalf of the First Lien Creditors) as First Lien Agent may designate in writing to such 1.5 Lien Creditors for such purpose. Interest shall be calculated to but excluding the business day on which such purchase and sale shall occur if the amounts so paid by such 1.5 Lien Creditors to the bank account designated by First Lien Agent are received in such bank account prior to 12:00 Noon, New York City time, and interest shall be calculated to and including such business day if the amounts so paid by such 1.5 Lien Creditors to the bank account designated by First Lien Agent are received in such bank account later than 12:00 Noon, New York City time. |
| 4. | Such purchase shall be expressly made without representation or warranty of any kind by the First Lien Creditors as to the First Lien Obligations or otherwise and without recourse to the First Lien Creditors, except that the First Lien Creditors shall represent and warrant: (i) the amount of the First Lien Obligations being purchased, (ii) that the First Lien Creditors own the First Lien Obligations free and clear of any Liens or encumbrances and (iii) the First Lien Creditors have the right to assign the First Lien Obligations and the assignment is duly authorized. All purchase or assignment documentation (including any cash collateral arrangements and back-stop letters of credit) in connection with the exercise of the 1.5 Lien Creditors rights under this Section 3 shall be in form and substance reasonably satisfactory to First Lien Agent. |
| 5. | In the event that any one or more of the 1.5 Lien Creditors exercises the purchase option set forth in this Section 3, First Lien Agent shall take such action with respect to the Collateral (including in an Insolvency Proceeding) as may be reasonably requested in good faith and in writing by such 1.5 Lien Creditors until the closing of such purchase. Notwithstanding anything to the contrary provided herein, the First Lien Creditors may take any Enforcement Actions they deem reasonable unless and until the 1.5 Lien Creditors have notified First Lien Agent of their irrevocable option to purchase the First Lien Obligations. |
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| 4. | MISCELLANEOUS |
| 1. | Representations. |
| 1. | Each Junior Lien Agent on behalf of itself and each other Junior Lien Creditor represents and warrants to First Lien Agent and the other First Lien Creditors that the execution, delivery and performance of this Intercreditor Agreement by such Junior Lien Agent on behalf of the applicable Junior Lien Creditors are within the powers of such Junior Lien Agent and have been duly authorized by such Junior Lien Agent pursuant to the terms of the applicable Junior Lien Documents. |
| 2. | First Lien Agent on behalf of itself and each other First Lien Creditor represents and warrants to the Junior Lien Agents and the other Junior Lien Creditors that the execution, delivery and performance of this Intercreditor Agreement by First Lien Agent on behalf of the First Lien Creditors are within the powers of First Lien Agent and have been duly authorized by First Lien Agent pursuant to the terms of the First Lien Credit Agreement. |
| 3. | Each Junior Lien Agent and First Lien Agent acknowledge and agree that neither has made any representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any other First Lien Loan Agreement or any other Junior Lien Document. Except as otherwise provided in this Intercreditor Agreement First Lien Agent will be entitled to manage and supervise its extensions of credit to any Obligor in accordance with law and their usual practices, modified from time to time as it deems appropriate. |
| 2. | Amendments. Any waiver, permit, consent or approval by any Creditor of or under any provision, condition or covenant to this Intercreditor Agreement must be in writing and shall be effective only to the extent it is set forth in writing and as to the specific facts or circumstances covered thereby. Any amendment of this Intercreditor Agreement must be in writing and signed by First Lien Agent and each Junior Lien Agent. Without limitation of the foregoing, the parties agree to make reasonable modifications to this Agreement in connection with and further to the accession of any representative of any Pari Passu Indebtedness to this Agreement as contemplated by Section 4.6. |
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| 3. | Successors and Assigns. |
| 1. | This Intercreditor Agreement is a continuing agreement and shall (i) remain in full force and effect until the earlier of (A) repayment in full in cash of all First Lien Obligations or (B) the repayment in full of all Junior Lien Obligations, (ii) be binding upon the parties and their successors and assigns, and (iii) inure to the benefit of and be enforceable by the parties and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause (iii), any Creditor may assign or otherwise transfer all or any portion of the First Lien Obligations or the Junior Lien Obligations, as applicable, to any other Person in the manner contemplated in the First Lien Loan Agreements and the Junior Lien Documents, and such other Person shall thereupon become vested with all the rights and obligations in respect thereof granted to such person herein or otherwise. In addition and without limiting the generality of the foregoing, if at any time in connection with or after the payment in full in cash of the First Lien Obligations and the termination of the loan commitments under the First Lien Loan Agreements, any of the Obligors enters into any credit facilities or other indebtedness (whether upon or after termination of the previous First Lien Obligations and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities) secured by Liens permitted under the Agreements to rank senior in priority to the Liens securing the Junior Lien Obligations on all or a portion of the Collateral, then (i) no such prior payment in full in cash of the First Lien Obligations shall be deemed to have occurred for all purposes of this Intercreditor Agreement, the First Lien Credit Agreement and the Junior Lien Documents and (ii) for all purposes of this Intercreditor Agreement, including for purposes of the Lien priority and rights in respect of the Collateral (or such portion thereof) set forth herein, the credit agreement or other principal document in respect of such new credit facilities or other indebtedness shall become and be deemed designated the “First Lien Credit Agreement”, (iii) the administrative agent, trustee or similar representative (or, if no such entity exists, the lender or investor) under such new First Lien Credit Agreement shall become and be deemed designated the “First Lien Agent”, (iv) the lenders, Cash Management Creditors, Hedging Creditors and other creditors under such new First Lien Credit Agreement shall become and be deemed designated the “First Lien Lenders” and (v) the obligations under such new First Lien Credit Agreement and the associated First Lien Loan Agreements shall automatically be treated as First Lien Obligations. |
| 2. | To the extent provided in their respective Agreements, each of the Creditors reserves the right to grant participations in, or otherwise sell, assign, transfer or negotiate all or any part of, or any interest in, the First Lien Obligations or the Junior Lien Obligations, as the case may be; provided, that, no Creditor shall be obligated to give any notices to or otherwise in any manner deal directly with any participant in the First Lien Obligations or the Junior Lien Obligations, as the case may be, and no participant shall be entitled to any rights or benefits under this Intercreditor Agreement except through the Creditor with which it is a participant. |
| 3. | This Intercreditor Agreement is the Intercreditor Agreement referred to in the First Lien Loan Agreements, the First Priority Intercreditor Agreement referred to in the 1.5 Lien Documents and the Intercreditor Agreement between the Junior Lien Agents in the Second Lien Documents. If the First Lien Loan Agreements or the Junior Lien Documents are refinanced or replaced with another Person, both such other Person and the other existing parties shall execute and deliver an agreement containing terms substantially identical to those contained in this Intercreditor Agreement. |
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| 4. | Insolvency. This Intercreditor Agreement shall be applicable both before and after the filing of any petition by or against Borrower or any other Obligor under any Bankruptcy Law or in any other Insolvency Proceeding and all converted or succeeding cases in respect thereof, and all references herein to Borrower or any other Obligor shall be deemed to apply to the trustee (or similar Person) for Borrower or any other Obligor and Borrower or any other Obligor as debtor-in-possession (or any other similar designation). The relative rights of the First Lien Creditors and the Junior Lien Creditors in or to any distributions from or in respect of any Collateral or proceeds of Collateral, shall continue after the filing thereof on the same basis as prior to the date of the petition, subject to any court order approving the financing of, or use of cash collateral by, Borrower or any other Obligor as debtor-in-possession (or any other similar designation). Without limiting the generality of the foregoing, this Intercreditor Agreement is intended to constitute and shall be deemed to constitute a “subordination agreement” within the meaning of Section 510(a) of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, and is intended to be and shall be interpreted to be enforceable to the maximum extent permitted pursuant to applicable non-bankruptcy law. |
| 5. | Bankruptcy Financing and Other Matters. |
| 1. | If Borrower or any other Obligor shall become subject to a case under the U.S. Bankruptcy Code or any other Bankruptcy Law and (whether as debtor(s)-in-possession or otherwise) move for approval of financing (a “DIP Financing”) to be provided by one or more lenders (the “DIP Lender”) under Section 364 of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, or the use of cash collateral under Section 363 of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, each Junior Lien Agent for itself and on behalf of the applicable Junior Lien Creditors agrees that (i) it and they shall raise no objection to such DIP Financing or use of cash collateral (nor will any Junior Lien Agent or any Junior Lien Creditor join with or support any third Person opposing, objecting to or contesting any such financing or use of cash collateral) unless First Lien Agent or Required Lenders shall object to such relief. Further (i) neither any Junior Lien Agent nor any other Junior Lien Creditor will request adequate protection or any other relief in connection therewith except as otherwise permitted below, and (ii) each Junior Lien Agent for itself and on behalf of the applicable Junior Lien Creditors agrees that to the extent the Liens securing the First Lien Obligations are subordinated to or pari passu with the Liens securing any such DIP Financing, the Liens of each Junior Lien Agent and the other Junior Lien Creditors on the Collateral shall be and shall be deemed to be subordinated to the Liens securing such DIP Financing (and all obligations relating thereto) without any further action on the part of any Person (provided such Junior Lien Agent shall confirm such priority in writing upon request of the Borrower or First Lien Agent), and the Liens securing the Junior Lien Obligations shall have the same priority with respect to the Collateral relative to the Liens securing the First Lien Obligations as if such financing had not occurred, so long as the applicable Junior Lien Agent and the other Junior Lien Creditors retain a Lien on the Collateral (including proceeds thereof arising after the commencement of such proceeding) subject to such subordination and priority scheme. |
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| 2. | Each Junior Lien Agent, for itself and on behalf of the applicable Junior Lien Creditors, agrees that, in the event of any Insolvency Proceeding, neither Junior Lien Agent nor the other Junior Lien Creditors will oppose or object to any sale or other disposition of any Collateral free and clear of the Liens securing the Junior Lien Obligations or other claims under Section 363 of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, if First Lien Agent or the Required Lenders, or a representative authorized by the First Lien Creditors, shall consent to such disposition; provided, however, that the proceeds of such disposition to be applied to the First Lien Obligations or the Junior Lien Obligations are applied in accordance with the Order of Payment. Further to the foregoing, the Junior Lien Creditors agree that they will be deemed to have consented, pursuant to Section 363(f)(2) of the Bankruptcy Code, to any sale supported by any of the First Lien Creditors, and no Junior Lien Creditor shall raise any objection pursuant to Section 363(f)(3) of the Bankruptcy Code to any such sale. |
| 3. | Each Junior Lien Agent, for itself and on behalf of the applicable Junior Lien Creditors, agrees that no Junior Lien Creditor shall contest, or support any other person in contesting, (i) any request by First Lien Agent or any other First Lien Creditor for adequate protection or (ii) any objection, based on a claim of a lack of adequate protection, by First Lien Agent or any other First Lien Creditor to any motion, relief, action or proceeding. Notwithstanding the immediately preceding sentence or anything in clause (a) above to the contrary, if, in connection with any DIP Financing or use of cash collateral, (A) any First Lien Creditor is granted adequate protection in the form of a Lien on additional collateral, each Junior Lien Agent may, for itself and on behalf of the applicable Junior Lien Creditors, seek or request adequate protection in the form of a Lien on such additional collateral, which Lien will be subordinated to the Liens of First Lien Agent and the other First Lien Creditors and Liens of the DIP Lender on the same basis as the other Liens of the applicable Junior Lien Agent and the other Junior Lien Creditors are subordinated to the Liens of First Lien Agent and the other First Lien Creditors under this Intercreditor Agreement, (B) any First Lien Creditor is granted adequate protection in the form of a 507(b) claim, each Junior Lien Agent may, for itself and on behalf of the other Junior Lien Creditors, seek or request adequate protection in the form of a 507(b) claim that is junior in priority to the First Lien Creditors’ administrative claim on at least the same basis as the Liens of each Junior Lien Agent and the other Junior Lien Creditors are subordinated to the Liens of First Lien Agent and the other First Lien Creditors under this Intercreditor Agreement, or (C) any Junior Lien Creditor is granted adequate protection in the form of a Lien on additional collateral, First Lien Agent shall, for itself and on behalf of the other First Lien Creditors, be granted adequate protection in the form of a Lien on such additional collateral that is senior to such Lien of the Junior Lien Creditors as security for the First Lien Obligations. |
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| 4. | Each Junior Lien Agent, for itself and on behalf of the applicable Junior Lien Creditors, agrees that until the First Lien Obligations have been paid in full in cash, no Junior Lien Creditor shall, without the prior written consent of First Lien Agent, seek or request relief from or modification of the automatic stay or any other stay in any Insolvency Proceeding in respect of any part of the Collateral, any proceeds thereof or any Lien of such Junior Lien Creditors. |
| 5. | Each Junior Lien Agent, for itself and on behalf of the other Junior Lien Creditors, agrees that no Junior Lien Creditor shall oppose or seek to challenge any claim by First Lien Agent or any other First Lien Creditor for allowance in any Insolvency Proceeding of First Lien Obligations consisting of post-petition interest, fees or expenses. Regardless of whether any such claim for post-petition interest, fees or expenses is allowed or allowable, and without limiting the generality of the other provisions of this Intercreditor Agreement, this Intercreditor Agreement expressly is intended to include and does include the “rule of explicitness” in that this Intercreditor Agreement expressly entitles the First Lien Creditors, and is intended to provide the First Lien Creditors with the right, to receive payment of all post-petition interest, fees or expenses through distributions made pursuant to the provisions of this Intercreditor Agreement even though such interest, fees and expenses are not allowed or allowable against the bankruptcy estate of Borrower or any other Obligor under Section 502(b)(2) or Section 506(b) of the U.S. Bankruptcy Code or under any other provision of the U.S. Bankruptcy Code or the comparable provisions of other applicable Bankruptcy Law. |
| 6. | Each Junior Lien Agent, for itself and on behalf of the other Junior Lien Creditors, waives any claim any Junior Lien Creditor may hereafter have against any First Lien Creditor arising out of (i) the election by any First Lien Creditor of the application of Section 1111(b)(2) of the U.S. Bankruptcy Code or the comparable provisions of other applicable Bankruptcy Law, or (ii) any use of cash collateral or financing arrangement, or any grant of a security interest in the Collateral, in any Insolvency Proceeding so long as such action is otherwise permitted under this Intercreditor Agreement. |
| 7. | Each of First Lien Agent, on behalf of the First Lien Creditors, and each Junior Lien Agent, on behalf of the applicable Junior Lien Creditors, agrees that, without the written consent of the other, it will not seek to vote with the other as a single class in connection with any plan of reorganization in any Insolvency Proceeding |
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| 8. | Nothing contained herein shall prohibit or in any way limit First Lien Agent or any First Lien Creditor from objecting on any basis in any Insolvency Proceeding or otherwise to any action taken by either Junior Lien Agent or any other Junior Lien Creditor, including the seeking by a Junior Lien Agent or any other Junior Lien Creditor of adequate protection or the assertion by a Junior Lien Agent or any other Junior Lien Creditors of any of its rights and remedies under the Junior Lien Documents or otherwise, except to the extent explicitly permitted hereunder. |
| 9. | If, in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, both on account of First Lien Obligations and on account of Junior Lien Obligations, then, to the extent the debt obligations distributed on account of the First Lien Obligations and on account of the Junior Lien Obligations are secured by Liens upon the same property, the provisions of this Intercreditor Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations. The foregoing is without prejudice to the entitlements of the First Lien Creditors hereunder to payment in full, in cash of all First Lien Obligations from the proceeds of Collateral, or distributions on account of claims secured by the Collateral, prior to the application of any such proceeds or distributions to the Junior Lien Obligations. |
| 10. | If First Lien Agent or any First Lien Creditor is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of Borrower or any other Obligor any amount previously received by it on account of First Lien Obligations (a “Recovery”), then the First Lien Obligations shall be reinstated to the extent of such Recovery and First Lien Agent and the other First Lien Creditors shall be entitled to a reinstatement of First Lien Obligations with respect to all such recovered amounts. If this Intercreditor Agreement shall have been terminated prior to such Recovery, this Intercreditor Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement. Any amounts received by a Junior Lien Agent or any Junior Lien Creditor on account of the Junior Lien Obligations after the termination of this Intercreditor Agreement shall, in the event of a reinstatement of this Intercreditor Agreement pursuant to this clause (j), be held in trust for and paid over to First Lien Agent for the benefit of the First Lien Creditors, for application to the reinstated First Lien Obligations. This clause (j) shall survive termination of this Intercreditor Agreement. |
| 6. | Pari Passu Payment Lien Obligations. As a condition to the Issuer or any other Obligor incurring any Pari Passu Indebtedness, a supplement to the Intercreditor Agreement substantially in the form of Annex A hereto (together with such modifications as the parties hereto may reasonably agree in order to effectuate the intent of this provision, a “Supplement”) pursuant to this Section 4.6, identifying the proposed Pari Passu Indebtedness, the agent or other representative, if any, and the lenders or holders providing such Pari Passu Indebtedness and the documents in connection with such Indebtedness, shall be executed and delivered to each of First Lien Agent and the Junior Lien Agents by the Obligors and an authorized representative of the lenders or holders of such proposed Pari Passu Indebtedness, pursuant to which such authorized representative shall agree to be bound by the terms and conditions of this Intercreditor Agreement. |
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| 7. | Bailee for Perfection. Each Creditor hereby appoints the other Creditor as agent for the purposes of perfecting the other Creditor’s Liens in and on any of the Collateral in the possession or under the control of such Creditor or its representatives, including, without limitation, Liens on Borrower’s and the other Obligors’ deposit accounts maintained by First Lien Agent and investment property and instruments in the possession or under the control of First Lien Agent; provided, that, the Creditor in the possession or control of any Collateral shall not have any duty or liability to protect or preserve any rights pertaining to any of the Collateral and, except for gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction, the non-possessing or non-controlling Creditor hereby waives and releases the other Creditor from, all claims and liabilities arising pursuant to the possessing or controlling Creditor’s role as bailee with respect to the Collateral, so long as the possessing or controlling Creditor shall use the same degree of care with respect thereto as the possessing or controlling Creditor uses for similar property pledged to the possessing or controlling Creditor as collateral for indebtedness of others to the possessing or controlling Creditor. Prior to the date on which First Lien Agent and the other First Lien Creditors shall have received final payment in full in cash of all of the First Lien Obligations and the First Lien Loan Agreements have been terminated, any Collateral in the possession or under the control of a Junior Lien Agent or the Junior Lien Creditor shall be forthwith delivered to First Lien Agent, except as otherwise may be required by applicable law or court order. After First Lien Agent and the other First Lien Creditors shall have received final payment in full in cash of all of the First Lien Obligations and the loan commitments under the First Lien Loan Agreements have been terminated, First Lien Agent shall deliver (i) the remainder of the Collateral, if any in their possession to 1.5 Lien Agent, except as may otherwise be required by applicable law or court order and (ii) a written notice prepared by 1.5 Lien Agent (at Issuer’s expense) to each landlord that has executed a landlord’s waiver and each bailee that has executed a bailee waiver stating that 1.5 Lien Agent is entitled to exercise the rights and take the actions set forth in such landlord’s waiver or bailee waiver. |
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| 8. | Notices. All notices, requests and demands to or upon the respective parties hereto shall be in writing and shall be deemed duly given, made or received: if delivered in person, immediately upon delivery; if by telex, telegram or facsimile transmission, immediately upon sending and upon confirmation of receipt; if by nationally recognized overnight courier service with instructions to deliver the next business day, one (1) business day after sending; and if mailed by certified mail, return receipt requested five (5) days after mailing to the parties at their addresses set forth below (or to such other addresses as the parties may designate in accordance with the provisions of this Section): |
To First Lien Agent or the First Lien Creditors:
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Alter Domus (US) LLC 225 W. Washington, 9th Fl Chicago, IL 60606 Email: Legal_agency@alterdomus.com; Attention: Olivia Otis
With a copy (which shall not constitute notice) to:
Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, NY 10019 Email: [***] Attention: [***]
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To 1.5 Lien Agent or the other 1.5 Lien Creditors: |
U.S. Bank Trust Company, National Association, as Trustee 100 Wall Street, Suite 600 New York, NY 1005 Attention: Administrator, CURO Group Holdings Corp.
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To Second Lien Agent or the other Second Lien Creditors: |
TMI Trust Company, as Existing Trustee 5901 Peachtree Dunwoody Road, Suite C495 Atlanta, GA 30328 Attention: Debra Schachel, Vice President |
Any of the above Creditors may change the address(es) to which all notices, requests and other communications are to be sent by giving written notice of such address change to the other Creditors in conformity with this Section 4.8, but such change shall not be effective until notice of such change has been received by the other Creditors.
| 9. | Counterparts. This Intercreditor Agreement may be executed in any number of counterparts, each of which shall be an original with the same force and effect as if the signatures thereto and hereto were upon the same instrument. |
| 10. | Governing Law. The validity, construction and effect of this Intercreditor Agreement shall be governed by the internal laws of the State of New York (without giving effect to principles of conflicts of law). |
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| 11. | Consent to Jurisdiction; Waiver of Jury Trial. EACH PARTY HERETO HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE STATE OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS INTERCREDITOR AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH CREDITOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS INTERCREDITOR AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS INTERCREDITOR AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. |
| 12. | Complete Agreement. This written Intercreditor Agreement is intended by the parties as a final expression of their agreement and is intended as a complete statement of the terms and conditions of their agreement with respect to the subject matter hereof. |
| 13. | No Third Parties Benefited. Except as expressly provided in Sections 4.2 and 4.3 hereof and consents which are deemed to have been given under Section 2.9 hereof, this Intercreditor Agreement is solely for the benefit of the Creditors and their respective successors, participants and assigns, and no other person shall have any right, benefit, priority or interest under, or because of the existence of, this Intercreditor Agreement. |
| 14. | Disclosures; Non-Reliance. Each Creditor has the means to, and shall in the future remain, fully informed as to the financial condition and other affairs of Borrower and the other Obligors and no Creditor shall have any obligation or duty to disclose any such information to any other Creditor. Except as expressly set forth in this Intercreditor Agreement, the parties hereto have not otherwise made to each other nor do they hereby make to each other any warranties, express or implied, nor do they assume any liability to each other with respect to: (a) the enforceability, validity, value or collectability of any of the Junior Lien Obligations or the First Lien Obligations or any guarantee or security which may have been granted to any of them in connection therewith, (b) Borrower’s or any other Obligors’ title to or right to transfer any of the Collateral, or (c) any other matter except as expressly set forth in this Intercreditor Agreement. |
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| 15. | Term. This Intercreditor Agreement is a continuing agreement and shall remain in full force and effect until the satisfaction in full of all First Lien Obligations and Junior Lien Obligations and the termination of the financing arrangements between First Lien Agent, the other First Lien Creditors, 1.5 Lien Agent, the other 1.5 Lien Creditors, Second Lien Agent, the other Second Lien Creditors, Borrower and the other Obligors. Notwithstanding the foregoing if, in any Insolvency Proceeding or otherwise, all or part of any payment with respect to the First Lien Obligations previously made shall be rescinded for any reason whatsoever, then the First Lien Obligations shall be reinstated to the extent of the amount so rescinded and, if theretofore terminated, this Intercreditor Agreement shall be reinstated in full force and effect and such prior termination shall not diminish, release, discharge, impair or otherwise affect the Lien priorities and the relative rights and obligations of the First Lien Creditors and the Junior Lien Creditors provided for herein. |
| 16. | Lien Subordination. Except as otherwise provided in this Intercreditor Agreement, nothing in this Intercreditor Agreement shall prohibit the receipt by either Junior Lien Agent or any other Junior Lien Creditor of the required payments of principal, premium, interest, fees and other amounts due under the Junior Lien Documents so long as such receipt is not the direct or indirect result of the enforcement or exercise by Junior Lien Agent or any other Junior Lien Creditor of rights or remedies as a secured creditor or otherwise in contravention of this Intercreditor Agreement. In the event a Junior Lien Agent or any other Junior Lien Creditor becomes a judgment lien creditor in respect of Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subordinated to the Liens securing First Lien Obligations on the same basis as the other Liens securing the Junior Lien Obligations are so subordinated to such First Lien Obligations under this Intercreditor Agreement. Nothing in this Intercreditor Agreement impairs or otherwise adversely affects any rights or remedies First Lien Agent or the other First Lien Creditors may have with respect to the Collateral. |
| 17. | Legend. Each of First Lien Agent on behalf of the First Lien Creditors and each Junior Lien Agent on behalf of the appliable Junior Lien Creditors agrees that each First Lien Loan Agreement and each Junior Lien Document, as applicable, constituting a collateral or security document, shall include the following language (or language to similar effect approved by First Lien Agent): |
“Notwithstanding anything herein to the contrary, the lien and security interest granted pursuant to this Agreement and the exercise of any right or remedy hereunder are subject to the provisions of the Intercreditor Agreement dated as of May 15, 2023 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among Alter Domus (US) LLC, in its capacity as collateral agent for, and acting on behalf of, itself and the other First Lien Creditors identified therein, U.S. Bank Trust Company, National Association, in its capacity as collateral agent for, and acting on behalf of, itself and the other 1.5 Lien Creditors identified therein and TMI Trust Company, in its capacity as collateral agent for, and acting on behalf of, itself and the other Second Lien Creditors identified therein, at any time that the Intercreditor Agreement is in effect. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control at any time the Intercreditor Agreement is in effect.”
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| 18. | Certain Rights. Notwithstanding anything to the contrary contained herein, the Junior Lien Creditors may, |
| 1. | file a claim or statement of interest with respect to the Junior Lien Obligations; provided that an Insolvency Proceeding has been commenced by or against the Company or any other Obligor; |
| 2. | take any action (not adverse to the priority status of the Liens on the Collateral securing the First Lien Obligations, or the rights of any First Lien Creditor to exercise remedies in respect thereof) in order to create, perfect, preserve or protect its Lien on the Collateral; |
| 3. | file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Junior Lien Creditors, including any claims secured by the Collateral, if any, in each case in accordance with the terms of this Agreement; |
| 4. | vote on any plan of reorganization, arrangement, compromise or liquidation, file any proof of claim, make other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement, with respect to the Junior Lien Obligations and the Collateral; provided that no filing of any claim or vote, or pleading related to such claim or vote, to accept or reject a disclosure statement, plan of reorganization, arrangement, compromise or liquidation, or any other document, agreement or proposal similar to the foregoing by any Junior Lien Agent or any other Junior Lien Creditor may be inconsistent with the provisions of this Agreement; |
| 5. | exercise any of its rights or remedies with respect to the Collateral after the termination of the Standstill Period to the extent permitted by Section 2.10; and |
| 6. | bid for or purchase Collateral at any public, private or judicial foreclosure upon such Collateral initiated by First Lien Agent or any other First Lien Creditor, or any sale of Collateral during an Insolvency Proceeding; provided that such bid may not include a “credit bid” in respect of any Junior Lien Obligations unless the cash proceeds of such bid are otherwise sufficient to cause the discharge in full of the First Lien Obligations. |
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| 19. | Conflicts. In the event of any conflict between the provisions of this Intercreditor Agreement and the provisions of any Junior Lien Document or any First Lien Loan Agreement, the provisions of this Intercreditor Agreement shall govern and control. With respect to each Junior Lien Agent and the other Junior Lien Creditors and the obligations of Junior Lien Agent under the Junior Lien Documents only, in the event of a conflict between this Intercreditor Agreement and the Junior Lien Documents, the terms of the applicable Junior Lien Documents shall govern and control. |
| 20. | If any Junior Lien Agent or other Junior Lien Creditor, in contravention of the terms of this Agreement, in any way takes, or attempts to or threatens to take, any action with respect to the Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement), or fails to take any action required by this Agreement, this Agreement shall create an irrebuttable presumption and admission by such Junior Lien Agent or Junior Lien Creditor that relief against such Junior Lien Agent or Junior Lien Creditor by injunction, specific performance and/or other appropriate equitable relief is necessary to prevent irreparable harm to the First Lien Creditors, it being understood and agreed by each Junior Lien Agent, on behalf of each Junior Lien Creditor represented by it, that (i) the First Lien Creditors’ damages from actions of any Junior Lien Creditor may at that time be difficult to ascertain and may be irreparable and (ii) each Junior Lien Secured Party waives any defense that the Obligors and/or the First Lien Creditors cannot demonstrate damage and/or be made whole by the awarding of damages. |
[signature pages follow]
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IN WITNESS WHEREOF, the parties have caused this Intercreditor Agreement to be duly executed as of the day and year first above written.
| FIRST LIEN AGENT: | |||
| ALTER DOMUS (US) LLC, as Collateral Agent under the First Lien Credit Agreement, for itself and the other First Lien Creditors | |||
| By: | /s/ Matthew Trybula | ||
| Name: | Matthew Trybula | ||
| Title: | Associate Counsel | ||
| 1.5 LIEN AGENT: | |||
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Collateral Agent under the 1.5 Lien Indenture, for itself and the other 1.5 Lien Creditors | |||
| By: | /s/ Christopher J. Grell | ||
| Name: | Christopher J. Grell | ||
| Title: | Vice President | ||
| SECOND LIEN AGENT: | |||
| TMI TRUST COMPANY, as Collateral Agent under the Second Lien Indenture, for itself and the other Second Lien Creditors | |||
| By: | /s/ Debra A. Schachel | ||
| Name: | Debra A. Schachel | ||
| Title: | Vice President | ||
CURO Group Holdings Corp. –
1L v. 1.5L and 2L Intercreditor Agreement
Each of the undersigned hereby acknowledges and agrees to the foregoing terms and provisions. By its signature below, each of the undersigned agrees that it will, together with its successors and assigns, be bound by the provisions hereof.
Each of the undersigned agrees that any Creditor holding or otherwise controlling Collateral (the “Controlling Creditor”) does so as bailee (under the UCC) for and on behalf of the other Creditors which have a Lien on such Collateral, and each Controlling Creditor is hereby authorized to and may turn over to 1.5 Lien Agent (if First Lien Agent or any First Lien Creditor is the Controlling Creditor) or to First Lien Agent (if a Junior Agent or any Junior Lien Creditor is the Controlling Creditor) any such Collateral upon request therefore, after all obligations and indebtedness of the undersigned to such Controlling Creditor shall have been fully paid and performed.
Each of the undersigned acknowledges and agrees that (i) although it may sign this Intercreditor Agreement it is not a party hereto and does not and will not receive any right, benefit, priority or interest under or because of the existence of the foregoing Intercreditor Agreement (except for a consent which is deemed to have been given by the Second Lien Creditors under Section 2.9), and (ii) it will execute and deliver such additional documents and take such additional action as may be necessary or desirable in the reasonable opinion of any of the Creditors to effectuate the provisions and purposes of the foregoing Intercreditor Agreement.
| CURO GROUP HOLDINGS CORP., | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | Chief Executive Officer | |
| CURO FINANCIAL TECHNOLOGIES CORP. | ||
| CURO INTERMEDIATE HOLDINGS CORP. | ||
| CURO MANAGEMENT LLC | ||
| SOUTHERNCO, INC. | ||
| FIRST HERITAGE CREDIT, LLC | ||
| FIRST HERITAGE CREDIT OF ALABAMA, LLC | ||
| FIRST HERITAGE CREDIT OF LOUISIANA, LLC | ||
| FIRST HERITAGE CREDIT OF MISSISSIPPI, LLC | ||
| FIRST HERITAGE CREDIT OF SOUTH CAROLINA, LLC | ||
| FIRST HERITAGE CREDIT OF TENNESSEE, LLC | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
CURO Group Holdings Corp. –
1L v. 1.5L and 2L Intercreditor Agreement
Each of the undersigned hereby acknowledges and agrees to the foregoing terms and provisions. By its signature below, each of the undersigned agrees that it will, together with its successors and assigns, be bound by the provisions hereof.
Each of the undersigned agrees that any Creditor holding or otherwise controlling Collateral (the “Controlling Creditor”) does so as bailee (under the UCC) for and on behalf of the other Creditors which have a Lien on such Collateral, and each Controlling Creditor is hereby authorized to and may turn over to 1.5 Lien Agent (if First Lien Agent or any First Lien Creditor is the Controlling Creditor) or to First Lien Agent (if a Junior Agent or any Junior Lien Creditor is the Controlling Creditor) any such Collateral upon request therefore, after all obligations and indebtedness of the undersigned to such Controlling Creditor shall have been fully paid and performed.
Each of the undersigned acknowledges and agrees that (i) although it may sign this Intercreditor Agreement it is not a party hereto and does not and will not receive any right, benefit, priority or interest under or because of the existence of the foregoing Intercreditor Agreement (except for a consent which is deemed to have been given by the Second Lien Creditors under Section 2.9), and (ii) it will execute and deliver such additional documents and take such additional action as may be necessary or desirable in the reasonable opinion of any of the Creditors to effectuate the provisions and purposes of the foregoing Intercreditor Agreement.
| CURO VENTURES, LLC | ||
| ATTAIN FINANCE, LLC | ||
| AD ASTRA RECOVERY SERVICES, INC. | ||
| CURO COLLATERAL SUB, LLC | ||
| CURO CREDIT, LLC | ||
| SOUTHERN FINANCE OF SOUTH CAROLINA, INC. | ||
| SOUTHERN FINANCE OF TENNESSEE, INC. | ||
| COVINGTON CREDIT, INC. | ||
| COVINGTON CREDIT OF GEORGIA, INC. | ||
| COVINGTON CREDIT OF ALABAMA, INC. | ||
| COVINGTON CREDIT OF TEXAS, INC. | ||
| HEIGHTS FINANCE HOLDING CO. | ||
| HEIGHTS FINANCE CORPORATION, an Illinois corporation | ||
| HEIGHTS FINANCE CORPORATION, a Tennessee corporation | ||
| QUICK CREDIT CORPORATION | ||
| By: | /s/ Gary L. Fulk | |
| Name: | Gary L. Fulk | |
| Title: | President | |
CURO Group Holdings Corp. –
1L v. 1.5L and 2L Intercreditor Agreement
Each of the undersigned hereby acknowledges and agrees to the foregoing terms and provisions. By its signature below, each of the undersigned agrees that it will, together with its successors and assigns, be bound by the provisions hereof.
Each of the undersigned agrees that any Creditor holding or otherwise controlling Collateral (the “Controlling Creditor”) does so as bailee (under the UCC) for and on behalf of the other Creditors which have a Lien on such Collateral, and each Controlling Creditor is hereby authorized to and may turn over to 1.5 Lien Agent (if First Lien Agent or any First Lien Creditor is the Controlling Creditor) or to First Lien Agent (if a Junior Agent or any Junior Lien Creditor is the Controlling Creditor) any such Collateral upon request therefore, after all obligations and indebtedness of the undersigned to such Controlling Creditor shall have been fully paid and performed.
Each of the undersigned acknowledges and agrees that (i) although it may sign this Intercreditor Agreement it is not a party hereto and does not and will not receive any right, benefit, priority or interest under or because of the existence of the foregoing Intercreditor Agreement (except for a consent which is deemed to have been given by the Second Lien Creditors under Section 2.9), and (ii) it will execute and deliver such additional documents and take such additional action as may be necessary or desirable in the reasonable opinion of any of the Creditors to effectuate the provisions and purposes of the foregoing Intercreditor Agreement.
| ENNOBLE FINANCE, LLC | ||
| By: | Curo Intermediate Holdings Corp. | |
| Its: | Sole Member | |
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
CURO Group Holdings Corp. –
1L v. 1.5L and 2L Intercreditor Agreement
Exhibit 10.8
Execution Version
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this “Intercreditor Agreement”), dated as of May 15, 2023, is by and among, U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as collateral agent under the 1.5 Lien Indenture (as hereinafter defined) for itself and the other 1.5 Lien Creditors (as hereinafter defined) (together with its successors and assigns, in such capacity, “1.5 Lien Agent”), and TMI TRUST COMPANY, as collateral agent under the Second Lien Indenture (as hereinafter defined) for itself and the other Second Lien Creditors (as hereinafter defined) (together with its successors and assigns, in such capacity, “Second Lien Agent”).
RECITALS:
Article I. The Issuer (as hereinafter defined), the other Obligors named therein and U.S. Bank Trust Company, National Association, as trustee and collateral agent, have entered into the 1.5 Lien Indenture, pursuant to which Issuer has issued, and the 1.5 Lien Noteholders have purchased, the 1.5 Lien Notes (as hereinafter defined), which 1.5 Lien Notes are secured by liens on and security interests in substantially all of the assets and properties of the Issuer and the other Obligors.
Article II. The Issuer, the other Obligors named therein and TMI Trust Company, as trustee and collateral agent, have entered into the Second Lien Indenture, pursuant to which Issuer has issued, and the Second Lien Noteholders have purchased, the Second Lien Notes (as hereinafter defined), which Second Lien Notes are secured by liens on and security interests in substantially all of the assets and properties of the Issuer and the other Obligors.
Article III. 1.5 Lien Agent, on behalf of itself and the other 1.5 Lien Creditors, and Second Lien Agent, on behalf of itself and the other Second Lien Creditors, enter into this Intercreditor Agreement to (i) confirm the relative priorities of the Liens (as defined herein) of 1.5 Lien Agent, on behalf of itself and the other 1.5 Lien Creditors, and Second Lien Agent, on behalf of itself and the other Second Lien Creditors, in the assets and properties of Issuer and the other Obligors, and (ii) provide for the orderly sharing among them, in accordance with such priorities, of the proceeds of such assets and properties upon any foreclosure thereon or other disposition thereof.
In consideration of the mutual benefits accruing to 1.5 Lien Agent, the other 1.5 Lien Creditors, Second Lien Agent and the other Second Lien Creditors hereunder and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:
| 1. | DEFINITIONS |
As used above and in this Intercreditor Agreement, the following terms shall have the meanings ascribed to them below:
| 1. | “1.5 Lien Agent” shall mean U.S. Bank Trust Company, National Association, in its capacity as collateral agent for itself and the other 1.5 Lien Creditors under the 1.5 Lien Indenture, and its successors and assigns. |
| 2. | “1.5 Lien Creditors” shall mean, collectively, the 1.5 Lien Notes Secured Parties and the applicable Pari Passu Indebtedness Secured Parties, if any. |
| 3. | “1.5 Lien Default” shall mean an Event of Default under the 1.5 Lien Documents or any applicable Pari Passu Payment Lien Document or a “Default” or similar term, as such term is defined in the 1.5 Lien Indenture Documents or any applicable Pari Passu Payment Lien Document. |
| 4. | “1.5 Lien Documents” shall mean, collectively, the1.5 Lien Indenture Documents and the applicable Pari Passu Payment Lien Documents, if any. |
| 5. | “1.5 Lien Obligations” shall mean, collectively, the 1.5 Lien Indenture Obligations and the applicable Pari Passu Payment Lien Obligations, if any. |
| 6. | “1.5 Lien Indenture” shall mean the Indenture, dated as of May 15, 2023, among the Issuer, the other Obligors named therein, 1.5 Lien Agent and 1.5 Lien Trustee, as the same now exists or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated in accordance with the terms of this Intercreditor Agreement. |
| 7. | “1.5 Lien Indenture Documents” shall mean the 1.5 Lien Indenture, the 1.5 Lien Notes and all agreements, documents, collateral documents, guaranties and instruments at any time executed and/or delivered by the Issuer or any other Obligor with, to or in favor of the 1.5 Lien Creditors in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise). |
| 8. | “1.5 Lien Indenture Obligations” shall mean all obligations, liabilities and indebtedness of every kind, nature and description owing by the Issuer or any other Obligor to the 1.5 Lien Notes Secured Parties evidenced by or arising under the 1.5 Lien Indenture Documents, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, including, without limitation, principal, interest, premium, if any, charges, fees, costs, indemnities and expenses (including, without limitation, attorneys’ and consultant fees and expenses), however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the 1.5 Lien Indenture Documents or after the commencement of any Insolvency Proceeding with respect to the Issuer or any other Obligor (and including, without limitation, the payment of interest which would accrue and become due but for the commencement of such Insolvency Proceeding, whether or not such interest is allowed or allowable in whole or in part in any such Insolvency Proceeding), and in each case, whether or not allowed or allowable in an Insolvency Proceeding. |
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| 9. | “1.5 Lien Noteholders” shall mean holders of the 1.5 Lien Notes at any time and from time to time and their respective successors and assigns (including any other creditor or group of creditors that at any time succeeds to or refinances, replaces or substitutes for all or any portion of the 1.5 Lien Obligations under the 1.5 Lien Indenture Documents at any time from time to time (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise)). |
| 10. | “1.5 Lien Notes” shall mean the Issuer’s 7.500% Senior 1.5 Lien Secured Notes due 2028, issued pursuant to the 1.5 Lien Indenture, as the same may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated in accordance with the terms of this Intercreditor Agreement (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise). |
| 11. | “1.5 Lien Notes Guarantees” shall mean, collectively, the guarantees of the Obligors (other than the Issuer) under the 1.5 Lien Notes and the 1.5 Lien Indenture. |
| 12. | “1.5 Lien Notes Secured Parties” shall mean, collectively, 1.5 Lien Agent, 1.5 Lien Trustee and the holders of the 1.5 Lien Notes, and their successors and assigns. |
| 13. | “1.5 Lien Trustee” shall mean U.S. Bank Trust Company, National Association, in its capacity as Trustee under the 1.5 Lien Indenture and its successors and assigns including each other Person acting in a similar capacity under any 1.5 Lien Indenture. |
| 14. | “Agreements” shall mean, collectively, the 1.5 Lien Documents and the Second Lien Documents. |
| 15. | “Bankruptcy Law” means any of the U.S. Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and the Winding-Up and Restructuring Act (Canada), each as now and hereafter in effect, any successors to such statutes and any other applicable bankruptcy, insolvency, winding-up, dissolution, restructuring, receivership, arrangement, liquidation, reorganization or similar law of any jurisdiction providing relief from or otherwise affecting the rights of creditors. |
| 16. | “Collateral” shall mean all assets and properties of any kind whatsoever, real or personal, tangible or intangible and wherever located, whether now owned or hereafter acquired, of Issuer or any other Obligor in which a security interest is granted (or purported to be granted) under any of the Agreements. |
| 17. | “Creditors” shall mean, collectively, 1.5 Lien Agent, 1.5 Lien Trustee, the other 1.5 Lien Creditors, Second Lien Agent, Second Lien Trustee and the other Second Lien Creditors, and their respective successors and assigns, being sometimes referred to herein individually as a “Creditor.” |
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| 18. | “Enforcement Action” shall mean the exercise of any rights and remedies in respect of Collateral securing the 1.5 Lien Obligations or the Second Lien Obligations by the applicable Creditor or Creditors including, without limitation, (a) any action by any Creditor to foreclose on the Lien of such Person in any Collateral, (b) any action by any Creditor to take possession of, sell or otherwise realize (judicially or nonjudicially) upon any Collateral (including, without limitation, by setoff or notification of account debtors), and/or (c) the commencement by any Creditor of any legal proceedings against Issuer or any other Obligor or with respect to any Collateral to facilitate the actions described in clauses (a) and (b) above. |
| 19. | “Event of Default” shall mean an “Event of Default” or similar term, as such term is defined in the 1.5 Lien Indenture, the Second Lien Indenture, or any Pari Passu Payment Lien Document, so long as any such Agreement is in effect. |
| 20. | “First Lien / Junior Lien Intercreditor Agreement” shall mean the Intercreditor Agreement, dated as of the date hereof, by and among Alter Domus (US) LLC, as collateral agent under the First Lien Credit Agreement (as defined therein), the 1.5 Lien Agent and Second Lien Agent, as amended, amended and restated, supplemented or otherwise modified from time to time. |
| 21. | “Insolvency Proceeding” shall mean, with respect to any Person, (a) a case, action or proceeding with respect to such Person (i) before any court or any other Official Body under any bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect (including any Bankruptcy Laws), or (ii) for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of with respect to any Person or otherwise relating to the liquidation, dissolution, winding-up or relief of such Person, (b) any liquidation, dissolution, reorganization or winding up of such Person whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or (c) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of such Person’s creditors generally or any substantial portion of its creditors undertaken under any law. |
| 22. | “Issuer” shall mean CURO Group Holdings Corp., a Delaware corporation, and its successors and assigns, including, without limitation, any receiver, trustee or debtor-in-possession on its behalf or on behalf of any of its successors or assigns. |
| 23. | “Lien” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing). |
| 24. | “Obligors” shall mean, individually and collectively, any Person liable on or in respect of the Second Lien Obligations or 1.5 Lien Obligations, and each of their successors and assigns, including, without limitation, a receiver, trustee or debtor-in-possession on behalf of such person or on behalf of any such successor or assign. |
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| 25. | “Official Body” shall mean any national, Federal, state, local or other government or political subdivision or any agency, authority, board, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. |
| 26. | “Order of Payment” shall mean, in connection with (i) the application, payment or distribution of proceeds of any Collateral or any proceeds of any Collateral pursuant to any Enforcement Action or otherwise following the occurrence and during the pendency of an Event of Default, (ii) any distribution of or in respect of any Collateral or on account of any claim secured by any Collateral (whether or not expressly characterized as such) upon or in any Insolvency Proceeding with respect to Issuer or any other Obligor, or (iii) any distribution of Collateral (or proceeds thereof) upon the liquidation or dissolution of Issuer or any other Obligor, the following order for such application: (i) first, subject to the First Lien/ Junior Lien Intercreditor Agreement and any other appliable Agreement, ratably to pay all 1.5 Lien Obligations in such order as specified in the relevant 1.5 Lien Documents until all 1.5 Lien Obligations have been paid in full in cash (including on account of interest accrued after the commencement of an Insolvency Proceeding, whether or not allowed in such proceeding; (ii) second, subject to the First Lien/ Junior Lien Intercreditor Agreement and any other appliable Agreement, ratably to pay any Second Lien Obligations in such order as specified in the relevant Agreements, until paid in full and (ii) third, to the Obligors or any other creditor thereof, as their interests may appear. |
| 27. | “Pari Passu Indebtedness” shall mean any indebtedness (1) that is permitted to be incurred and secured by all or a portion of the Collateral under each of the Agreements and (2) that is permitted under each of the Agreements to be secured on a pari passu basis with the 1.5 Lien Obligations or the Second Lien Obligations; provided that (i) such Indebtedness is so designated as Pari Passu Indebtedness in an officers’ certificate delivered to 1.5 Lien Agent and Second Lien Agent and (ii) the Issuer and an authorized representative of the holders of such Indebtedness shall have executed and delivered a Supplement. For the avoidance of doubt, Pari Passu Indebtedness shall constitute one, but only one of, 1.5 Lien Obligations or Second Lien Obligations hereunder, as set forth in the applicable Supplement. |
| 28. | “Pari Passu Indebtedness Secured Parties” shall mean, collectively, the agent, the trustee or other representative, if any (and their respective successors and assigns), and the holders of Pari Passu Indebtedness identified in a Supplement. |
| 29. | “Pari Passu Payment Lien Documents” shall mean any loan agreement, indenture or other instrument that evidences or governs any Pari Passu Indebtedness. |
| 30. | “Pari Passu Payment Lien Obligations” shall mean all obligations (including interest that accrues after the commencement of an insolvency or bankruptcy case, regardless of whether such interest is an allowed claim under such case) outstanding under the Pari Passu Payment Lien Documents. |
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| 31. | “Person” or “person” shall mean any individual, sole proprietorship, partnership, corporation (including without limitation, any corporation which elects subchapter S status under the Internal Revenue Code of 1986, as amended), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock company, trust, joint venture, or other entity or any government or any agency or instrumentality or political subdivision thereof. |
| 32. | “Second Lien Agent” shall mean TMI Trust Company, in its capacity as collateral agent for itself and the other Second Lien Creditors under the Second Lien Indenture, and its successors and assigns. |
| 33. | “Second Lien Creditors” shall mean, collectively, the Second Lien Notes Secured Parties and the applicable Pari Passu Indebtedness Secured Parties, if any. |
| 34. | “Second Lien Default” shall mean an Event of Default under the Second Lien Documents or any applicable Pari Passu Payment Lien Document or a “Default” or similar term, as such term is defined in the Second Lien Indenture Documents or any applicable Pari Passu Payment Lien Document. |
| 35. | “Second Lien Documents” shall mean, collectively, the Second Lien Indenture Documents and the applicable Pari Passu Payment Lien Documents, if any. |
| 36. | “Second Lien Indenture” shall mean the Indenture, dated as of July 30, 2021, among the Issuer, the other Obligors named therein, Second Lien Agent and Second Lien Trustee, as the same now exists or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated in accordance with the terms of this Intercreditor Agreement. |
| 37. | “Second Lien Indenture Documents” shall mean the Second Lien Indenture, the Second Lien Notes, this Agreement, the Junior Intercreditor Agreement and all agreements, documents, collateral documents, guaranties and instruments at any time executed and/or delivered by the Issuer or any other Obligor with, to or in favor of the Second Lien Creditors in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise). |
| 38. | “Second Lien Indenture Obligations” shall mean all obligations, liabilities and indebtedness of every kind, nature and description owing by the Issuer or any other Obligor to the Second Lien Notes Secured Parties evidenced by or arising under the Second Lien Indenture Documents, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, including, without limitation, principal, interest, premium, if any, charges, fees, costs, indemnities and expenses (including, without limitation, attorneys’ and consultant fees and expenses), however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Second Lien Indenture Documents or after the commencement of any Insolvency Proceeding with respect to the Issuer or any other Obligor (and including, without limitation, the payment of interest which would accrue and become due but for the commencement of such Insolvency Proceeding, whether or not such interest is allowed or allowable in whole or in part in any such Insolvency Proceeding), and in each case, whether or not allowed or allowable in an Insolvency Proceeding. |
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| 39. | “Second Lien Noteholders” shall mean holders of the Second Lien Notes at any time and from time to time and their respective successors and assigns (including any other creditor or group of creditors that at any time succeeds to or refinances, replaces or substitutes for all or any portion of the Second Lien Obligations under the Second Lien Indenture Documents at any time from time to time (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise)). |
| 40. | “Second Lien Notes” shall mean the Issuer’s 7.500% Senior Secured Notes due 2028, issued pursuant to the Second Lien Indenture, as the same may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated in accordance with the terms of this Intercreditor Agreement (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise). |
| 41. | “Second Lien Notes Guarantees” shall mean, collectively, the guarantees of the Obligors (other than the Issuer) under the Second Lien Notes and the Second Lien Indenture. |
| 42. | “Second Lien Notes Secured Parties” shall mean, collectively, Second Lien Agent, Second Lien Trustee and the holders of the Second Lien Notes, and their successors and assigns. |
| 43. | “Second Lien Obligations” shall mean, collectively, the Second Lien Indenture Obligations and the applicable Pari Passu Payment Lien Obligations, if any. |
| 44. | “Second Lien Trustee” shall mean TMI Trust Company, in its capacity as Trustee under the Second Lien Indenture and its successors and assigns including each other Person acting in a similar capacity under any Second Lien Indenture. |
| 45. | “Standstill Period” shall have the meaning specified in Section 2.10 hereof. |
| 46. | “Supplement” shall have the meaning specified in Section 4.6 hereof. |
| 47. | “UCC” shall mean the Uniform Commercial Code, as amended and in effect in any applicable jurisdiction. |
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| 48. | “U.S. Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, any successor statute. |
| 49. | All terms defined in the UCC as in effect in the State of New York, unless otherwise defined herein shall have the meanings set forth therein. All references to any term in the plural shall include the singular and all references to any term in the singular shall include the plural. |
| 2. | PAYMENTS; SECURITY INTERESTS; PRIORITIES; REMEDIES |
| 1. | 1.5 Lien Agent and the other 1.5 Lien Creditors hereby acknowledge that Second Lien Agent, for its own benefit and for the benefit of the other Second Lien Creditors has been granted Liens upon all of the Collateral pursuant to the Second Lien Documents to secure the Second Lien Obligations. Second Lien Agent on behalf of itself and the other Second Lien Creditors hereby acknowledges that 1.5 Lien Agent, for the benefit of the 1.5 Lien Creditors, has been granted Liens upon all of the Collateral pursuant to the 1.5 Lien Documents to secure the 1.5 Lien Obligations. |
| 2. | (a) Notwithstanding the date, order or time of attachment, or the date, order, time or manner of perfection, or the date, order or time of filing or recordation of any document or instrument, or other method of perfecting a Lien in favor of each Creditor in any Collateral, and notwithstanding any conflicting terms or conditions which may be contained in any of the Agreements and notwithstanding any provision of the UCC or any other applicable law or any other circumstance whatsoever (including any non-perfection or non-validity or unenforceability of any Lien purporting to secure the 1.5 Lien Obligations or the Second Lien Obligations), any Lien securing 1.5 Lien Obligations now or hereafter held by or on behalf 1.5 Lien Agent or the other 1.5 Lien Creditors or any agent or trustee therefore, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, will have priority over and be senior in all respects to the Liens securing the Second Lien Obligations (and the Liens securing the Second Lien Obligations will be junior and subordinate to the Liens securing the 1.5 Lien Obligations). All Liens on the Collateral securing any 1.5 Lien Obligations shall be and remain senior in all respects and prior to all Liens on the Collateral securing any Second Lien Obligations for all purposes, whether or not such Lien securing any 1.5 Lien Obligations are subordinated to any Lien securing any other obligation of any Obligor or any other Person. The parties hereto acknowledge and agree that it is their intent that the 1.5 Lien Obligations (and the security therefor) constitute a separate and distinct class (and separate and distinct claims) from the Second Lien Obligations (and the security therefor). |
| 1. | Each of 1.5 Lien Agent, for itself and on behalf of the other 1.5 Lien Creditors, and Second Lien Agent, for itself and on behalf of the applicable Second Lien Creditors, agrees that it will not, and hereby waives any right to, contest or support any other Person in contesting, in any proceeding (including any Insolvency Proceeding), the priority, perfection, validity or enforceability of any Lien in the Collateral of 1.5 Lien Agent or Second Lien Agent, as the case may be; provided that nothing in this Intercreditor Agreement shall be construed to prevent or impair the rights of 1.5 Lien Agent or any other 1.5 Lien Creditor to enforce this Intercreditor Agreement. |
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| 2. | The parties hereto agree that, so long as the 1.5 Lien Obligations have not been paid in full in cash, none of Issuer nor any other Obligor shall, nor shall any such Person permit any of its subsidiaries to, (i) unless waived in writing by 1.5 Lien Agent, grant or permit any additional Liens on any asset to secure the Second Lien Obligations (or any of them) unless it has granted, or concurrently therewith grants, a Lien on such asset to secure the 1.5 Lien Obligations or (ii) unless waived in writing by Second Lien Agent or otherwise permitted by the Second Lien Indenture, as applicable, grant or permit any additional Liens on any asset to secure any 1.5 Lien Obligations unless it has granted, or concurrently therewith grants, a Lien on such asset to secure the Second Lien Obligations, with each such Lien to be subject to the provisions of this Intercreditor Agreement. To the extent that the provisions of this paragraph (c) are not complied with for any reason, without limiting any other right or remedy available to 1.5 Lien Agent or the other 1.5 Lien Creditors, Second Lien Agent agrees, for itself and on behalf of the Second Lien Creditors, that any amounts received by or distributed to any Second Lien Creditors pursuant to or as a result of any Lien granted in contravention of this Section 2.2(c) shall be subject to Section 2.4 hereof. |
| 3. | The parties hereto acknowledge and agree that it is their intention that there is no Collateral securing the Second Lien Obligations that does not also secure the 1.5 Lien Obligations. In furtherance of the foregoing, the parties hereto agree: |
| 1. | to cooperate in good faith in order to determine, upon any reasonable request by 1.5 Lien Agent, the specific assets included in the Collateral, the steps required to be taken to perfect the Liens of Second Lien Agent thereon and the identity of the parties obligated under the Second Lien Documents in respect of the Second Lien Obligations; |
| 2. | that, except to the extent otherwise agreed to by 1.5 Lien Agent, the documents, agreements and instruments creating or evidencing the Collateral securing the Second Lien Obligations and the Liens of Second Lien Agent shall be in all respects in the same form as the documents, agreements and instruments creating or evidencing the Collateral securing the 1.5 Lien Obligations and the Liens of 1.5 Lien Agent, other than with respect to the first priority and junior priority nature of the Liens created or evidenced thereunder, the identity of the secured parties that are parties thereto or secured thereby and other matters contemplated by this Intercreditor Agreement; and |
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| 3. | that the Second Lien Agent will not obtain “control” (as defined in the UCC in effect in the State of New York) of any deposit account or securities account maintained by Issuer or any other Obligor (other than a deposit account maintained with 1.5 Lien Agent) or file any UCC financing statement against Issuer or any other Obligor after the date hereof without giving 1.5 Lien Agent prior written notice of its intention to do so. For the avoidance of doubt, this Section 2.2(d) shall not require the creation of a security interest in favor of the Second Lien Agent or Second Lien Creditors in any assets expressly designated as “Excluded Assets” or a similar term under the Second Lien Documents. |
| 3. | The priorities of the Liens provided in Section 2.2 hereof shall not be altered or otherwise affected by (a) any amendment, modification, supplement, extension, renewal, restatement, replacement or refinancing of the 1.5 Lien Obligations or the Second Lien Obligations, nor (b) any action or inaction which any of the Creditors may take or fail to take in respect of the Collateral. |
| 4. | Prior to the payment in full in cash of the 1.5 Lien Obligations, (i) all Collateral and all proceeds of the Collateral realized pursuant to any Enforcement Action by any Person or otherwise distributed or paid by any Obligor to any Creditor following the occurrence and during the pendency of an Event of Default, (ii) any distribution of or in respect of any Collateral or on account of any claim secured by any Collateral (whether or not expressly characterized as such) upon or in any Insolvency Proceeding with respect to Issuer or any other Obligor, and (iii) any distribution of Collateral (or proceeds thereof) upon the liquidation or dissolution of Issuer or any other Obligor, shall be payable to 1.5 Lien Agent on behalf of the 1.5 Lien Creditors and, to the extent received by Second Lien Agent or any of the other Second Lien Creditors, shall be segregated from the other funds and property of Second Lien Agent or such Second Lien Creditor, as the case may be, and received and held in trust by Second Lien Agent or such Second Lien Creditor, as the case may be, as trustee, and shall be forthwith paid over, in the funds and currency received, to 1.5 Lien Agent for application to the 1.5 Lien Obligations. For the avoidance of doubt, the foregoing turnover provision shall apply to all Collateral and all proceeds of Collateral (including all cash removed from any Obligor’s premises or accounts) received by or on behalf of Second Lien Agent or any other Second Lien Creditor in connection with any Enforcement Action taken by Second Lien Agent or any other Second Lien Creditor following the expiration of the Standstill Period notwithstanding anything to the contrary in Section 2.10 hereof. All proceeds of the Collateral received by 1.5 Lien Agent or the other 1.5 Lien Creditors after the 1.5 Lien Obligations have been paid in full in cash shall be forthwith paid over, in the funds and currency received, to Second Lien Agent for application to the Second Lien Obligations (unless otherwise required by law). |
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| 5. | The foregoing provisions of this Intercreditor Agreement are intended solely to govern the respective Lien priorities as between the Creditors and shall not impose on any Creditor any obligations in respect of the disposition of proceeds of any Collateral which would conflict with prior perfected claims therein in favor of any other person or any order or decree of any court or governmental authority or any applicable law. |
| 6. | In the event that 1.5 Lien Agent, the other 1.5 Lien Creditors, Second Lien Agent or the other Second Lien Creditors shall, in the exercise of their rights under their Agreements or otherwise, receive possession or control of any books and records of Issuer or any other Obligor which contain information identifying or pertaining to any Collateral in which 1.5 Lien Agent, the other 1.5 Creditors, Second Lien Agent or the other Second Lien Creditors (as the case may be) has been granted a Lien, such Person shall notify such other Person that they have received such books and records and shall, as promptly as practicable thereafter, make available to such other Person (at the expense of Issuer and the other Obligors) such books and records for inspection and duplication. |
| 7. | Subject to the terms and conditions set forth in this Intercreditor Agreement and, to the extent outstanding and in effect, the First Lien / Junior Lien Intercreditor Agreement, 1.5 Lien Agent and the other 1.5 Lien Creditors shall have the exclusive right to manage, perform and enforce the terms of the 1.5 Lien Documents with respect to the Collateral, to exercise and enforce all privileges and rights thereunder according to their discretion and the exercise of their business judgment, including, without limitation, the exclusive right to take or retake control or possession of such Collateral and to hold, prepare for sale, process, sell, lease, dispose of, or liquidate such Collateral and to appoint an agent in connection with the foregoing, and to incur expenses in connection with such sale, lease or other disposition and to exercise all of the rights and remedies of a secured creditor under the UCC of any applicable jurisdiction or other applicable law (including, without limitation, any Bankruptcy Law). In exercising rights and remedies with respect to the Collateral, 1.5 Lien Agent and the other 1.5 Lien Creditors may enforce the provisions of the 1.5 Lien Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their discretion. In furtherance of the foregoing, Second Lien Agent, for itself and on behalf of the Second Lien Creditors, agrees that, subject to the terms and conditions of this Intercreditor Agreement (including, without limitation, Section 2.10 hereof), neither Second Lien Agent nor any other Second Lien Creditor will (i) enforce or exercise, or seek to enforce or exercise, any rights or remedies with respect to any Collateral (including, without limitation, the exercise of any right of set-off or under any lockbox agreement, control account agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which Second Lien Agent or any Second Lien Creditor is a party) or institute or commence, or join with any Person in commencing, any action or proceeding with respect to such rights or remedies (including any action of foreclosure, enforcement, collection or execution and any Insolvency Proceeding), (ii) contest, protest or object to any foreclosure action or proceeding brought by 1.5 Lien Agent or any other enforcement or exercise by any 1.5 Lien Creditor of any rights or remedies relating to the Collateral so long as Liens of the Second Lien Creditors attach to the proceeds thereof, subject to the relative priorities provided for in this Intercreditor Agreement, or (iii) object to the forbearance by any 1.5 Lien Creditor from commencing or pursuing any foreclosure action or proceeding or any other enforcement or exercise of any rights or remedies. In connection with taking any Enforcement Action against the Collateral (including without limitation any public or private sale under the UCC), 1.5 Lien Agent shall give Second Lien Agent such reasonable notice of such sale as may be required under the applicable UCC; provided, however, that, subject to Section 3.5 hereof, 10 days’ notice shall be deemed in all respects to be commercially reasonable notice. |
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| 8. | Notwithstanding anything to the contrary contained in any of the Agreements, but subject to Section 2.9 below and Section 2.10 below and, to the extent outstanding and in effect, the First Lien / Junior Lien Intercreditor Agreement, prior to the time when 1.5 Lien Agent and the other 1.5 Lien Creditors shall have received payment in full of all 1.5 Lien Obligations in cash, whether or not an Insolvency Proceeding has been commenced by or against Issuer or any other Obligor, during the continuance of an Event of Default, the Second Lien Creditors shall not have the right to restrict or permit, or approve or disapprove, the sale, transfer or other disposition of, or otherwise deal with, the Collateral or to take and continue any Enforcement Action with respect to the Collateral. |
| 9. | (a) Prior to the existence of an Event of Default, upon any release, sale or disposition of Collateral permitted pursuant to the terms of the 1.5 Lien Documents and the Second Lien Documents that results in the release of the Lien of 1.5 Lien Agent and the other 1.5 Lien Creditors in any Collateral, the Liens of Second Lien Agent and the other Second Lien Creditors shall be automatically and unconditionally released with no further consent or action of any Person. Second Lien Agent shall, at the expense of the Obligors, promptly execute and deliver such release documents as 1.5 Lien Agent may upon written request reasonably require in connection with any such release, sale or disposition of Collateral. |
| 1. | Second Lien Agent shall, at any time during the continuance of an Event of Default, at the expense of the Obligors: |
| 1. | upon the written request of 1.5 Lien Agent with respect to the Collateral identified in such request as set forth below (which request shall specify the proposed terms of the sale and the type and amount of consideration to be received in connection therewith), subject to clause (ii) below, release or otherwise terminate its Liens on such Collateral, to the extent such Collateral is to be sold or otherwise disposed of either by 1.5 Lien Agent or its agents; |
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| 2. | deliver such release documents as 1.5 Lien Agent may reasonably require in connection therewith; provided, that, |
| 1. | 1.5 Lien Agent shall promptly apply any such proceeds as specified in the Order of Payment until the 1.5 Lien Obligations have been paid in full in cash, |
| 2. | if any such sale or disposition results in a surplus after application of the proceeds in the Order of Payment to the 1.5 Lien Obligations, such surplus shall be paid to Second Lien Agent for the prompt application to the Second Lien Obligations until the Second Lien Obligations have been paid in full in cash; |
| 3. | if the closing of the sale or disposition of such Collateral is not consummated, 1.5 Lien Agent shall promptly return all release documents to Second Lien Agent for the benefit of the Second Lien Creditors. |
| 2. | Second Lien Agent and the other Second Lien Creditors shall be deemed, in all cases, to have consented under the Agreements to such sale or other disposition of Collateral described in Sections 2.9(a) and (b) above. In furtherance of the foregoing, Second Lien Agent, for itself and on behalf of the other Second Lien Creditors, hereby irrevocably constitutes and appoints 1.5 Lien Agent and any officer or agent of 1.5 Lien Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Second Lien Agent or such other Second Lien Creditor or in 1.5 Lien Agent’s own name, from time to time in 1.5 Lien Agent’s discretion, for the purpose of carrying out the terms of this clause (c) and clauses (b)(i) and (ii) above, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of such clauses, including any endorsements or other instruments of transfer or release. |
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| 10. | Except as specifically provided in Section 2.11 below and subject to the First Lien / Junior Lien Intercreditor Agreement, to the extent outstanding and in effect, notwithstanding any rights or remedies available to Second Lien Agent or the other Second Lien Creditors under any of the Second Lien Documents, applicable law or otherwise, prior to the time that 1.5 Lien Agent and the 1.5 Lien Creditors shall have received the payment in full of all 1.5 Lien Obligations in cash, neither Second Lien Agent nor any of the other Second Lien Creditors shall, directly or indirectly, take any Enforcement Action with respect to any of the Collateral; provided, however, commencing on the 151st day after receipt by 1.5 Lien Agent of Second Lien Agent’s written declaration of a Second Lien Default which constitutes an “Event of Default” and written demand by Second Lien Agent to Issuer for the accelerated payment of all Second Lien Obligations (the “Standstill Period”; provided, the Standstill Period shall be tolled during any period during which 1.5 Lien Agent is stayed from pursuing Enforcement Actions against the Collateral, whether because Issuer or any other Obligor is subject to an Insolvency Proceeding or otherwise), Second Lien Agent or the other Second Lien Creditors may take action to enforce their Liens on the Collateral, but only so long as 1.5 Lien Agent and/or the 1.5 Lien Creditors are not pursuing in a commercially reasonable manner the exercise of their enforcement rights or remedies against all or a material portion of the Collateral (including, without limitation, commencement of any action to foreclose its Liens on all or any material portion of the Collateral, notification of account debtors to make payments to 1.5 Lien Agent, any action to take possession of all or any material portion of the Collateral or commencement of any legal proceedings or actions against or with respect to all or any material portion of the Collateral) and with any determination of which Collateral to proceed against, and in what order, to be made by 1.5 Lien Agent or such 1.5 Lien Creditors in their reasonable judgment); provided further that (x) any Collateral or any proceeds of Collateral received by Second Lien Agent or such other Second Lien Creditor, as the case may be, in connection with the enforcement of such Lien shall be applied in accordance with the Order of Payment and (y) 1.5 Lien Agent or any other 1.5 Lien Creditors may at any time take over such enforcement proceedings from Second Lien Agent or the other Second Lien Creditors so long as 1.5 Lien Agent or such 1.5 Lien Creditors, as the case may be, pursue enforcement proceedings with respect to all or a material portion of the Collateral in a commercially reasonable manner, with any determination of which Collateral to proceed against, and in what order, to be made by 1.5 Lien Agent or such 1.5 Lien Creditors in their reasonable judgment, and provided further that Second Lien Agent or the other Second Lien Creditors, as the case may be, shall only be able to recoup any expenses incurred by them in accordance with the priorities set forth in the Order of Payment. In any sale or other disposition of any of the Collateral by Second Lien Agent and/or the other Second Lien Creditors, Second Lien Agent and/or the other Second Lien Creditors shall conduct such sale or disposition in a commercially reasonable manner. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all rights and remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under the Bankruptcy Law of any applicable jurisdiction. |
| 11. | Section 2.10 above shall not be construed to in any way limit or impair the right of: (a) any 1.5 Lien Creditor to bid for or purchase Collateral at any private or judicial foreclosure upon such Collateral initiated by any other Creditor, (b) any Second Lien Creditor to cash bid for or purchase for cash Collateral, in an amount sufficient to pay the 1.5 Lien Obligations in full, at any private or judicial foreclosure upon such Collateral initiated by any other Creditor, (c) [reserved], and (d) the Second Lien Creditors’ right to receive any remaining proceeds of Collateral after satisfaction and payment in full in cash of all 1.5 Lien Obligations. |
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| 12. | If the 1.5 Lien Creditors should honor a request by Issuer for a loan, advance or other financial accommodation under the 1.5 Lien Documents, whether or not the 1.5 Lien Creditors have knowledge that the honoring of such request would result in an event of default, or act, condition or event which with notice or passage of time or both would constitute an event of default under the Second Lien Documents, in no event shall 1.5 Lien Agent or the other 1.5 Lien Creditors have any liability to Second Lien Agent or the other Second Lien Creditors as a result of such breach, and without limiting the generality of the foregoing, Second Lien Agent and the other Second Lien Creditors agree that neither 1.5 Lien Agent nor the 1.5 Lien Creditors shall have any liability for tortious interference with contractual relations or for inducement by 1.5 Lien Agent or the other 1.5 Lien Creditors of Issuer to breach of contract or otherwise. |
| 13. | (a) Subject to the First Lien/ Junior Lien Intercreditor Agreement, to the extent outstanding and in effect, unless and until the 1.5 Lien Obligations have been satisfied in full, in cash, 1.5 Lien Agent and the other 1.5 Lien Creditors shall have the sole and exclusive right as among the Creditors, subject to the rights of the Obligors under the 1.5 Lien Documents, to adjust settlement for any insurance policy covering the Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Collateral. Subject to the First Lien/ Junior Lien Intercreditor Agreement, to the extent outstanding and in effect, unless and until the 1.5 Lien Obligations have been satisfied in full, and subject to the rights of the Obligors under the 1.5 Lien Documents, all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect of the Collateral shall be paid to 1.5 Lien Agent for the benefit of the 1.5 Lien Creditors pursuant to the terms of the 1.5 Lien Documents. |
| 14. |
| 1. | Second Lien Agent and the other Second Lien Creditors shall not agree to, without the written consent of 1.5 Lien Agent: |
| 1. | make any amendment of the Second Lien Documents that would shorten the due dates of any principal or interest payments of the Second Lien Obligations; |
| 2. | increase the interest rate under the Second Lien Documents by more than 300 basis points (excluding increases resulting from the accrual of interest at the default rate or interest paid-in-kind); or |
| 3. | add to the Collateral securing the Second Lien Obligations except as permitted by this Intercreditor Agreement. |
| 15. | Each Creditor shall give to the other Creditors concurrently with the giving thereof to Issuer (i) a copy of any written notice by such Creditor of an Event of Default under its respective Agreements with Issuer, or written notice of demand of payment from Issuer and (ii) a copy of any written notice sent by such Creditor to Issuer at any time a default under such Creditor’s Agreements with Issuer exists stating such Creditor’s intention to exercise any of its enforcement rights or remedies, including written notice pertaining to any foreclosure on any of the Collateral or other judicial or nonjudicial remedy in respect thereof to the extent permitted hereunder, and any legal process served or filed in connection therewith; provided, that, the failure of any party to give notice as required hereby shall not affect the relative priorities of Creditor’s respective Liens as provided herein or the validity or effectiveness of any such notice as against Issuer or any other Obligor. |
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| 16. | In the event that any Second Lien Default shall have occurred solely as a result of a 1.5 Lien Default, and if such 1.5 Lien Default shall have been cured by Issuer or any other Obligor or waived by 1.5 Lien Agent or the other 1.5 Lien Creditors (as applicable), then (i) such Second Lien Default shall be deemed to be automatically cured by Issuer or such other Obligor or waived by Second Lien Agent and the other Second Lien Creditors, as the case may be, and (ii) and any period under Section 2.10 hereof commenced and then existence shall terminate for all purposes hereunder and Second Lien Agent and the other Second Lien Creditors shall cease any remedial actions commenced and then continuing in connection with such Second Lien Default. |
| 3. | SECOND LIEN CREDITOR PURCHASE OPTION |
| 1. | Following the occurrence of (i) written notice by 1.5 Lien Agent or the other 1.5 Lien Creditors of their intent to accelerate the payment of the 1.5 Lien Obligations or to commence any Enforcement Action with respect to any Collateral (or acceleration or the actual commencement of any such Enforcement Action), (ii) the commencement of any Insolvency Proceeding, or (iii) a payment default under the 1.5 Lien Documents which has not been cured or waived by the applicable creditors within 30 days after the occurrence thereof, any Second Lien Creditor shall have the option at any time within 90 days after such occurrence upon five (5) business days’ prior written notice from Second Lien Agent (on behalf of any such Second Lien Creditors) to 1.5 Lien Agent to purchase all (but not less than all) of the 1.5 Lien Obligations from the 1.5 Lien Creditors. Such notice from Second Lien Agent (on behalf of any such Second Lien Creditors) to 1.5 Lien Agent shall be irrevocable. In order to effectuate the foregoing, 1.5 Lien Agent shall estimate, upon the written request of Second Lien Creditors upon the exercise of such election, the amount in cash that would be necessary to so purchase such 1.5 Lien Obligations (assuming the date of the purchase is the date the election was made). The 1.5 Lien Obligations shall be purchased among the Second Lien Creditors (other than Second Lien Trustee and Second Lien Agent) giving notice to Second Lien Agent of their intent (which notice shall be irrevocable) to exercise the purchase option hereunder based on the amounts specified therein. |
| 2. | On the date specified by Second Lien Creditors in such notice (which shall not be less than five (5) business days, nor more than thirty (30) days, after the receipt by 1.5 Lien Agent of the notice from Second Lien Agent of certain Second Lien Creditors election to exercise such option), the 1.5 Lien Creditors shall sell to such Second Lien Creditors electing to purchase, and the Second Lien Creditors electing to purchase shall purchase from the 1.5 Lien Creditors, the 1.5 Lien Obligations all in accordance with the terms and conditions to be agreed upon directly among 1.5 Lien Agent and such Second Lien Creditors that have elected to purchase the 1.5 Lien Obligations. The 1.5 Lien Creditors hereby represent and warrant that, as of the date hereof, no approval of any court or other regulatory or governmental authority is required for such sale. |
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| 3. | Upon the date of such purchase and sale, the Second Lien Creditors exercising the purchase option in this Section 3 shall pay to the 1.5 Lien Creditors as the purchase price therefor the full amount of all the 1.5 Lien Obligations then outstanding and unpaid (including principal, premium (prepayment or otherwise, it being understood that any prepayment or acceleration-related premium, shall be deemed to have matured and become due and payable upon the exercise by the Second Lien Creditors of their rights under this Section 3 as if the payment of the 1.5 Lien Obligations had been accelerated whether or not they actually have been accelerated), interest, fees and expenses, including reasonable attorneys’ fees and legal expenses but excluding any early termination fee payable pursuant to the 1.5 Lien Indenture, which amount may be different from the estimate calculated in Section 3.1 above). Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account of 1.5 Lien Agent (on behalf of the 1.5 Lien Creditors) as 1.5 Lien Agent may designate in writing to such Second Lien Creditors for such purpose. Interest shall be calculated to but excluding the business day on which such purchase and sale shall occur if the amounts so paid by such Second Lien Creditors to the bank account designated by 1.5 Lien Agent are received in such bank account prior to 12:00 Noon, New York City time, and interest shall be calculated to and including such business day if the amounts so paid by such Second Lien Creditors to the bank account designated by 1.5 Lien Agent are received in such bank account later than 12:00 Noon, New York City time. |
| 4. | Such purchase shall be expressly made without representation or warranty of any kind by the 1.5 Lien Creditors as to the 1.5 Lien Obligations or otherwise and without recourse to the 1.5 Lien Creditors, except that the 1.5 Lien Creditors shall represent and warrant: (i) the amount of the 1.5 Lien Obligations being purchased, (ii) that the 1.5 Lien Creditors own the 1.5 Lien Obligations free and clear of any Liens or encumbrances and (iii) the 1.5 Lien Creditors have the right to assign the 1.5 Lien Obligations and the assignment is duly authorized. All purchase or assignment documentation in connection with the exercise of the Second Lien Creditors rights under this Section 3 shall be in form and substance reasonably satisfactory to 1.5 Lien Agent. |
| 5. | In the event that any one or more of the Second Lien Creditors exercises the purchase option set forth in this Section 3, 1.5 Lien Agent shall take such action with respect to the Collateral (including in an Insolvency Proceeding) as may be reasonably requested in good faith and in writing by such Second Lien Creditors until the closing of such purchase. Notwithstanding anything to the contrary provided herein, the 1.5 Lien Creditors may take any Enforcement Actions they deem reasonable unless and until the Second Lien Creditors have notified 1.5 Lien Agent of their irrevocable option to purchase the 1.5 Lien Obligations. |
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| 4. | MISCELLANEOUS |
| 1. | Representations. |
| 1. | Second Lien Agent on behalf of itself and each other Second Lien Creditor represents and warrants to 1.5 Lien Agent and the other 1.5 Lien Creditors that the execution, delivery and performance of this Intercreditor Agreement by Second Lien Agent on behalf of the Second Lien Creditors are within the powers of Second Lien Agent and have been duly authorized by Second Lien Agent pursuant to the terms of the Second Lien Documents. |
| 2. | 1.5 Lien Agent on behalf of itself and each other 1.5 Lien Creditor represents and warrants to Second Lien Agent and the other Second Lien Creditors that the execution, delivery and performance of this Intercreditor Agreement by 1.5 Lien Agent on behalf of the 1.5 Lien Creditors are within the powers of 1.5 Lien Agent and have been duly authorized by 1.5 Lien Agent pursuant to the terms of the 1.5 Lien Indenture. |
| 3. | Second Lien Agent and 1.5 Lien Agent acknowledge and agree that neither has made any representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any other 1.5 Lien Document or any other Second Lien Document. Except as otherwise provided in this Intercreditor Agreement 1.5 Lien Agent will be entitled to manage and supervise its extensions of credit to any Obligor in accordance with law and their usual practices, modified from time to time as it deems appropriate. |
| 2. | Amendments. Any waiver, permit, consent or approval by any Creditor of or under any provision, condition or covenant to this Intercreditor Agreement must be in writing and shall be effective only to the extent it is set forth in writing and as to the specific facts or circumstances covered thereby. Any amendment of this Intercreditor Agreement must be in writing and signed by 1.5 Lien Agent and Second Lien Agent. Without limitation of the foregoing, the parties agree to make reasonable modifications to this Agreement in connection with and further to the accession of any representative of any Pari Passu Indebtedness to this Agreement as contemplated by Section 4.6. |
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| 3. | Successors and Assigns. |
| 1. | This Intercreditor Agreement is a continuing agreement and shall (i) remain in full force and effect until the earlier of (A) repayment in full in cash of all 1.5 Lien Obligations or (B) the repayment in full of all Second Lien Obligations, (ii) be binding upon the parties and their successors and assigns, and (iii) inure to the benefit of and be enforceable by the parties and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause (iii), any Creditor may assign or otherwise transfer all or any portion of the 1.5 Lien Obligations or the Second Lien Obligations, as applicable, to any other Person in the manner contemplated in the 1.5 Lien Documents and the Second Lien Documents, and such other Person shall thereupon become vested with all the rights and obligations in respect thereof granted to such person herein or otherwise (including, for the avoidance of doubt, pursuant to the First Lien / Junior Lien Intercreditor Agreement, to the extent outstanding and in effect). In addition and without limiting the generality of the foregoing, if at any time in connection with or after the payment in full in cash of the 1.5 Lien Obligations, any of the Obligors enters into any credit facilities or other indebtedness (whether upon or after termination of the previous 1.5 Lien Obligations and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities) secured by Liens permitted under the Agreements to rank senior in priority to the Liens securing the Second Lien Obligations on all or a portion of the Collateral, then (i) no such prior payment in full in cash of the 1.5 Lien Obligations shall be deemed to have occurred for all purposes of this Intercreditor Agreement, the 1.5 Lien Indenture and the Second Lien Documents and (ii) for all purposes of this Intercreditor Agreement, including for purposes of the Lien priority and rights in respect of the Collateral (or such portion thereof) set forth herein, the credit agreement or other principal document in respect of such new credit facilities or other indebtedness shall become and be deemed designated the “1.5 Lien Indenture”, (iii) the administrative agent, trustee or similar representative (or, if no such entity exists, the lender or investor) under such new 1.5 Lien Indenture shall become and be deemed designated the “1.5 Lien Agent”, (iv) the lenders and other creditors under such new 1.5 Lien Indenture shall become and be deemed designated the “1.5 Lien Creditors” and (v) the obligations under such new 1.5 Lien Indenture and the associated 1.5 Lien Documents shall automatically be treated as 1.5 Lien Obligations. |
| 2. | To the extent provided in their respective Agreements, each of the Creditors reserves the right to grant participations in, or otherwise sell, assign, transfer or negotiate all or any part of, or any interest in, the 1.5 Lien Obligations or the Second Lien Obligations, as the case may be; provided, that, no Creditor shall be obligated to give any notices to or otherwise in any manner deal directly with any participant in the 1.5 Lien Obligations or the Second Lien Obligations, as the case may be, and no participant shall be entitled to any rights or benefits under this Intercreditor Agreement except through the Creditor with which it is a participant. |
| 3. | This Intercreditor Agreement is the Junior Intercreditor Agreement referred to in the 1.5 Lien Documents and the Intercreditor Agreement referred to in the Second Lien Documents. If the 1.5 Lien Documents or the Second Lien Documents are refinanced or replaced with another Person, both such other Person and the other existing parties shall execute and deliver an agreement containing terms substantially identical to those contained in this Intercreditor Agreement. |
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| 4. | Insolvency. This Intercreditor Agreement shall be applicable both before and after the filing of any petition by or against Issuer or any other Obligor under any Bankruptcy Law or in any other Insolvency Proceeding and all converted or succeeding cases in respect thereof, and all references herein to Issuer or any other Obligor shall be deemed to apply to the trustee (or similar Person) for Issuer or any other Obligor and Issuer or any other Obligor as debtor-in-possession (or any other similar designation). The relative rights of the 1.5 Lien Creditors and the Second Lien Creditors in or to any distributions from or in respect of any Collateral or proceeds of Collateral, shall continue after the filing thereof on the same basis as prior to the date of the petition, subject to any court order approving the financing of, or use of cash collateral by, Issuer or any other Obligor as debtor-in-possession (or any other similar designation). Without limiting the generality of the foregoing, this Intercreditor Agreement is intended to constitute and shall be deemed to constitute a “subordination agreement” within the meaning of Section 510(a) of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, and is intended to be and shall be interpreted to be enforceable to the maximum extent permitted pursuant to applicable non-bankruptcy law. |
| 5. | Bankruptcy Financing and Other Matters. |
| 1. | If Issuer or any other Obligor shall become subject to a case under the U.S. Bankruptcy Code or any other Bankruptcy Law and (whether as debtor(s)-in-possession or otherwise) move for approval of financing (a “DIP Financing”) to be provided by one or more lenders (the “DIP Lender”) under Section 364 of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, or the use of cash collateral under Section 363 of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, Second Lien Agent for itself and on behalf of the applicable Second Lien Creditors agrees that (i) it and they shall raise no objection to such DIP Financing or use of cash collateral (nor will Second Lien Agent or any Second Lien Creditor join with or support any third Person opposing, objecting to or contesting any such financing or use of cash collateral) unless 1.5 Lien Agent shall object to such relief. Further (i) neither Second Lien Agent nor any other Second Lien Creditor will request adequate protection or any other relief in connection therewith except as otherwise permitted below, and (ii) Second Lien Agent for itself and on behalf of the applicable Second Lien Creditors agrees that to the extent the Liens securing the 1.5 Lien Obligations are subordinated to or pari passu with the Liens securing any such DIP Financing, the Liens of Second Lien Agent and the other Second Lien Creditors on the Collateral shall be and shall be deemed to be subordinated to the Liens securing such DIP Financing (and all obligations relating thereto) without any further action on the part of any Person (provided Second Lien Agent shall confirm such priority in writing upon request of the Issuer or 1.5 Lien Agent), and the Liens securing the Second Lien Obligations shall have the same priority with respect to the Collateral relative to the Liens securing the 1.5 Lien Obligations as if such financing had not occurred, so long as Second Lien Agent and the other Second Lien Creditors retain a Lien on the Collateral (including proceeds thereof arising after the commencement of such proceeding) subject to such subordination and priority scheme. |
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| 2. | Second Lien Agent, for itself and on behalf of the Second Lien Creditors, agrees that, in the event of any Insolvency Proceeding, neither Second Lien Agent nor the other Second Lien Creditors will oppose or object to any sale or other disposition of any Collateral free and clear of the Liens securing the Second Lien Obligations or other claims under Section 363 of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, if 1.5 Lien Agent , or a representative authorized by the 1.5 Lien Creditors, shall consent to such disposition; provided, however, that the proceeds of such disposition to be applied to the 1.5 Lien Obligations or the Second Lien Obligations are applied in accordance with the Order of Payment. Further to the foregoing, the Second Lien Creditors agree that they will be deemed to have consented, pursuant to Section 363(f)(2) of the Bankruptcy Code, to any sale supported by any of the 1.5 Lien Creditors, and no Second Lien Creditor shall raise any objection pursuant to Section 363(f)(3) of the Bankruptcy Code to any such sale. |
| 3. | Second Lien Agent, for itself and on behalf of the Second Lien Creditors, agrees that no Second Lien Creditor shall contest, or support any other person in contesting, (i) any request by 1.5 Lien Agent or any other 1.5 Lien Creditor for adequate protection or (ii) any objection, based on a claim of a lack of adequate protection, by 1.5 Lien Agent or any other 1.5 Lien Creditor to any motion, relief, action or proceeding. Notwithstanding the immediately preceding sentence or anything in clause (a) above to the contrary, if, in connection with any DIP Financing or use of cash collateral, (A) any 1.5 Lien Creditor is granted adequate protection in the form of a Lien on additional collateral, Second Lien Agent may, for itself and on behalf of the Second Lien Creditors, seek or request adequate protection in the form of a Lien on such additional collateral, which Lien will be subordinated to the Liens of 1.5 Lien Agent and the 1.5 Lien Creditors and Liens of the DIP Lender on the same basis as the other Liens of Second Lien Agent and the other Second Lien Creditors are subordinated to the Liens of 1.5 Lien Agent and the 1.5 Lien Creditors under this Intercreditor Agreement, (B) any 1.5 Lien Creditor is granted adequate protection in the form of a 507(b) claim, Second Lien Agent may, for itself and on behalf of the other Second Lien Creditors, seek or request adequate protection in the form of a 507(b) claim that is junior in priority to the 1.5 Lien Creditors’ administrative claim on at least the same basis as the Liens of each Second Lien Agent and the other Second Lien Creditors are subordinated to the Liens of 1.5 Lien Agent and the 1.5 Lien Creditors under this Intercreditor Agreement, or (C) any Second Lien Creditor is granted adequate protection in the form of a Lien on additional collateral, 1.5 Lien Agent shall, for itself and on behalf of the other 1.5 Lien Creditors, be granted adequate protection in the form of a Lien on such additional collateral that is senior to such Lien of the Second Lien Creditors as security for the 1.5 Lien Obligations. |
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| 4. | Second Lien Agent, for itself and on behalf of the Second Lien Creditors, agrees that until the 1.5 Lien Obligations have been paid in full in cash, no Second Lien Creditor shall, without the prior written consent of 1.5 Lien Agent, seek or request relief from or modification of the automatic stay or any other stay in any Insolvency Proceeding in respect of any part of the Collateral, any proceeds thereof or any Lien of such Second Lien Creditors. |
| 5. | Second Lien Agent, for itself and on behalf of the other Second Creditors, agrees that no Second Lien Creditor shall oppose or seek to challenge any claim by 1.5 Lien Agent or any other 1.5 Lien Creditor for allowance in any Insolvency Proceeding of 1.5 Lien Obligations consisting of post-petition interest, fees or expenses. Regardless of whether any such claim for post-petition interest, fees or expenses is allowed or allowable, and without limiting the generality of the other provisions of this Intercreditor Agreement, this Intercreditor Agreement expressly is intended to include and does include the “rule of explicitness” in that this Intercreditor Agreement expressly entitles the 1.5 Lien Creditors, and is intended to provide the 1.5 Lien Creditors with the right, to receive payment of all post-petition interest, fees or expenses through distributions made pursuant to the provisions of this Intercreditor Agreement even though such interest, fees and expenses are not allowed or allowable against the bankruptcy estate of Issuer or any other Obligor under Section 502(b)(2) or Section 506(b) of the U.S. Bankruptcy Code or under any other provision of the U.S. Bankruptcy Code or the comparable provisions of other applicable Bankruptcy Law. |
| 6. | Second Lien Agent, for itself and on behalf of the other Second Lien Creditors, waives any claim any Second Lien Creditor may hereafter have against any 1.5 Lien Creditor arising out of (i) the election by any 1.5 Lien Creditor of the application of Section 1111(b)(2) of the U.S. Bankruptcy Code or the comparable provisions of other applicable Bankruptcy Law, or (ii) any use of cash collateral or financing arrangement, or any grant of a security interest in the Collateral, in any Insolvency Proceeding so long as such action is otherwise permitted under this Intercreditor Agreement. |
| 7. | Each of 1.5 Lien Agent, on behalf of the 1.5 Lien Creditors, and each Second Lien Agent, on behalf of the Second Lien Creditors, agrees that, without the written consent of the other, it will not seek to vote with the other as a single class in connection with any plan of reorganization in any Insolvency Proceeding |
| 8. | Nothing contained herein shall prohibit or in any way limit 1.5 Lien Agent or any 1.5 Lien Creditor from objecting on any basis in any Insolvency Proceeding or otherwise to any action taken by either Second Lien Agent or any other Second Lien Creditor, including the seeking by Second Lien Agent or any other Second Lien Creditor of adequate protection or the assertion by a Second Lien Agent or any other Second Lien Creditors of any of its rights and remedies under the Second Lien Documents or otherwise, except to the extent explicitly permitted hereunder. |
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| 9. | If, in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, both on account of 1.5 Lien Obligations and on account of Second Lien Obligations, then, to the extent the debt obligations distributed on account of the 1.5 Lien Obligations and on account of the Second Lien Obligations are secured by Liens upon the same property, the provisions of this Intercreditor Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations. The foregoing is without prejudice to the entitlements of the 1.5 Lien Creditors hereunder to payment in full, in cash of all 1.5 Lien Obligations from the proceeds of Collateral, or distributions on account of claims secured by the Collateral, prior to the application of any such proceeds or distributions to the Second Lien Obligations. |
| 10. | If 1.5 Lien Agent or any 1.5 Lien Creditor is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of Issuer or any other Obligor any amount previously received by it on account of 1.5 Lien Obligations (a “Recovery”), then the 1.5 Lien Obligations shall be reinstated to the extent of such Recovery and 1.5 Lien Agent and the 1.5 Lien Creditors shall be entitled to a reinstatement of 1.5 Lien Obligations with respect to all such recovered amounts. If this Intercreditor Agreement shall have been terminated prior to such Recovery, this Intercreditor Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement. Any amounts received by Second Lien Agent or any Second Lien Creditor on account of the Second Lien Obligations after the termination of this Intercreditor Agreement shall, in the event of a reinstatement of this Intercreditor Agreement pursuant to this clause (j), be held in trust for and paid over to 1.5 Lien Agent for the benefit of the 1.5 Lien Creditors, for application to the reinstated 1.5 Lien Obligations. This clause (j) shall survive termination of this Intercreditor Agreement. |
| 6. | Pari Passu Payment Lien Obligations. As a condition to the Issuer or any other Obligor incurring any Pari Passu Indebtedness, a supplement to the Intercreditor Agreement substantially in the form of Annex A hereto (together with such modifications as the parties hereto may reasonably agree in order to effectuate the intent of this provision, a “Supplement”) pursuant to this Section 4.6, identifying the proposed Pari Passu Indebtedness, the agent or other representative, if any, and the lenders or holders providing such Pari Passu Indebtedness and the documents in connection with such Indebtedness, shall be executed and delivered to each of 1.5 Lien Agent and Second Lien Agent by the Obligors and an authorized representative of the lenders or holders of such proposed Pari Passu Indebtedness, pursuant to which such authorized representative shall agree to be bound by the terms and conditions of this Intercreditor Agreement. |
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| 7. | Bailee for Perfection. Each Creditor hereby appoints the other Creditor as agent for the purposes of perfecting the other Creditor’s Liens in and on any of the Collateral in the possession or under the control of such Creditor or its representatives, including, without limitation, Liens on Issuer’s and the other Obligors’ deposit accounts maintained by 1.5 Lien Agent and investment property and instruments in the possession or under the control of 1.5 Lien Agent; provided, that, the Creditor in the possession or control of any Collateral shall not have any duty or liability to protect or preserve any rights pertaining to any of the Collateral and, except for gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction, the non-possessing or non-controlling Creditor hereby waives and releases the other Creditor from, all claims and liabilities arising pursuant to the possessing or controlling Creditor’s role as bailee with respect to the Collateral, so long as the possessing or controlling Creditor shall use the same degree of care with respect thereto as the possessing or controlling Creditor uses for similar property pledged to the possessing or controlling Creditor as collateral for indebtedness of others to the possessing or controlling Creditor. Prior to the date on which 1.5 Lien Agent and the other 1.5 Lien Creditors shall have received final payment in full in cash of all of the 1.5 Lien Obligations and the 1.5 Lien Documents have been terminated, any Collateral in the possession or under the control of Second Lien Agent or the Second Lien Creditor shall be forthwith delivered to 1.5 Lien Agent, except as otherwise may be required by applicable law or court order. After 1.5 Lien Agent and the other 1.5 Lien Creditors shall have received final payment in full in cash of all of the 1.5 Lien Obligations and the loan commitments under the 1.5 Lien Documents have been terminated, 1.5 Lien Agent shall deliver (i) the remainder of the Collateral, if any in their possession to Second Lien Agent, except as may otherwise be required by applicable law or court order and (ii) a written notice prepared by Second Lien Agent (at Issuer’s expense) to each landlord that has executed a landlord’s waiver and each bailee that has executed a bailee waiver stating that Second Lien Agent is entitled to exercise the rights and take the actions set forth in such landlord’s waiver or bailee waiver. |
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| 8. | Notices. All notices, requests and demands to or upon the respective parties hereto shall be in writing and shall be deemed duly given, made or received: if delivered in person, immediately upon delivery; if by telex, telegram or facsimile transmission, immediately upon sending and upon confirmation of receipt; if by nationally recognized overnight courier service with instructions to deliver the next business day, one (1) business day after sending; and if mailed by certified mail, return receipt requested five (5) days after mailing to the parties at their addresses set forth below (or to such other addresses as the parties may designate in accordance with the provisions of this Section): |
To 1.5 Lien Agent or the other 1.5 Lien Creditors:
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U.S. Bank Trust Company, National Association, as Trustee 100 Wall Street, Suite 600 New York, NY 1005 Attention: Administrator, CURO Group Holdings Corp.
With a copy (which shall not constitute notice) to:
Troutman Pepper 875 Third Avenue New York, NY 10022 Email: adam.jachimowski@troutman.com Attention: Adam Jachimowski
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To Second Lien Agent or the other Second Lien Creditors: |
TMI Trust Company, as Existing Trustee 5901 Peachtree Dunwoody Road, Suite C495 Atlanta, GA 30328 Attention: Debra Schachel, Vice President |
Either of the above Creditors may change the address(es) to which all notices, requests and other communications are to be sent by giving written notice of such address change to the other Creditor in conformity with this Section 4.8, but such change shall not be effective until notice of such change has been received by the other Creditor.
| 9. | Counterparts. This Intercreditor Agreement may be executed in any number of counterparts, each of which shall be an original with the same force and effect as if the signatures thereto and hereto were upon the same instrument. |
| 10. | Governing Law. The validity, construction and effect of this Intercreditor Agreement shall be governed by the internal laws of the State of New York (without giving effect to principles of conflicts of law). |
| 11. | Consent to Jurisdiction; Waiver of Jury Trial. EACH PARTY HERETO HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE STATE OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS INTERCREDITOR AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH CREDITOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS INTERCREDITOR AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS INTERCREDITOR AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. |
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| 12. | Complete Agreement. This written Intercreditor Agreement is intended by the parties as a final expression of their agreement and is intended as a complete statement of the terms and conditions of their agreement with respect to the subject matter hereof. |
| 13. | No Third Parties Benefited. Except as expressly provided in Sections 4.2 and 4.3 hereof and consents which are deemed to have been given under Section 2.9 hereof, this Intercreditor Agreement is solely for the benefit of the Creditors and their respective successors, participants and assigns, and no other person shall have any right, benefit, priority or interest under, or because of the existence of, this Intercreditor Agreement. |
| 14. | Disclosures; Non-Reliance. Each Creditor has the means to, and shall in the future remain, fully informed as to the financial condition and other affairs of Issuer and the other Obligors and no Creditor shall have any obligation or duty to disclose any such information to any other Creditor. Except as expressly set forth in this Intercreditor Agreement, the parties hereto have not otherwise made to each other nor do they hereby make to each other any warranties, express or implied, nor do they assume any liability to each other with respect to: (a) the enforceability, validity, value or collectability of any of the Second Lien Obligations or the 1.5 Lien Obligations or any guarantee or security which may have been granted to any of them in connection therewith, (b) Issuer’s or any other Obligors’ title to or right to transfer any of the Collateral, or (c) any other matter except as expressly set forth in this Intercreditor Agreement. |
| 15. | Term. This Intercreditor Agreement is a continuing agreement and shall remain in full force and effect until the satisfaction in full of all 1.5 Lien Obligations and Second Lien Obligations and the termination of the financing arrangements between 1.5 Lien Agent, the other 1.5 Lien Creditors, Second Lien Agent, the other Second Lien Creditors, Issuer and the other Obligors. Notwithstanding the foregoing if, in any Insolvency Proceeding or otherwise, all or part of any payment with respect to the 1.5 Lien Obligations previously made shall be rescinded for any reason whatsoever, then the 1.5 Lien Obligations shall be reinstated to the extent of the amount so rescinded and, if theretofore terminated, this Intercreditor Agreement shall be reinstated in full force and effect and such prior termination shall not diminish, release, discharge, impair or otherwise affect the Lien priorities and the relative rights and obligations of the 1.5 Lien Creditors and the Second Lien Creditors provided for herein. |
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| 16. | Lien Subordination. Except as otherwise provided in this Intercreditor Agreement, nothing in this Intercreditor Agreement shall prohibit the receipt by Second Lien Agent or any other Second Lien Creditor of the required payments of principal, premium, interest, fees and other amounts due under the Second Lien Documents so long as such receipt is not the direct or indirect result of the enforcement or exercise by Second Lien Agent or any other Second Lien Creditor of rights or remedies as a secured creditor or otherwise in contravention of this Intercreditor Agreement. In the event Second Lien Agent or any other Second Lien Creditor becomes a judgment lien creditor in respect of Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subordinated to the Liens securing 1.5 Lien Obligations on the same basis as the other Liens securing the Second Lien Obligations are so subordinated to such 1.5 Lien Obligations under this Intercreditor Agreement. Nothing in this Intercreditor Agreement impairs or otherwise adversely affects any rights or remedies 1.5 Lien Agent or the other 1.5 Lien Creditors may have with respect to the Collateral. |
| 17. | Legend. Each of 1.5 Lien Agent on behalf of the 1.5 Lien Creditors and Second Lien Agent on behalf of the Second Lien Creditors agrees that each 1.5 Lien Document and each Second Lien Document, as applicable, constituting a collateral or security document, shall include the following language (or language to similar effect approved by 1.5 Lien Agent): |
“Notwithstanding anything herein to the contrary, the lien and security interest granted pursuant to this Agreement and the exercise of any right or remedy hereunder are subject to the provisions of the Intercreditor Agreement dated as of May 15, 2023 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among U.S. Bank Trust Company, National Association, in its capacity as collateral agent for, and acting on behalf of, itself and the other 1.5 Lien Creditors identified therein and TMI Trust Company, in its capacity as collateral agent for, and acting on behalf of, itself and the other Second Lien Creditors identified therein, at any time that the Intercreditor Agreement is in effect. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control at any time the Intercreditor Agreement is in effect.”
| 18. | Certain Rights. Notwithstanding anything to the contrary contained herein, the Second Lien Creditors may, |
| 1. | file a claim or statement of interest with respect to the Second Lien Obligations; provided that an Insolvency Proceeding has been commenced by or against the Company or any other Obligor; |
| 2. | take any action (not adverse to the priority status of the Liens on the Collateral securing the 1.5 Lien Obligations, or the rights of any 1.5 Lien Creditor to exercise remedies in respect thereof) in order to create, perfect, preserve or protect its Lien on the Collateral; |
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| 3. | file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Second Lien Creditors, including any claims secured by the Collateral, if any, in each case in accordance with the terms of this Agreement; |
| 4. | vote on any plan of reorganization, arrangement, compromise or liquidation, file any proof of claim, make other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement, with respect to the Second Lien Obligations and the Collateral; provided that no filing of any claim or vote, or pleading related to such claim or vote, to accept or reject a disclosure statement, plan of reorganization, arrangement, compromise or liquidation, or any other document, agreement or proposal similar to the foregoing by any Second Lien Agent or any other Second Lien Creditor may be inconsistent with the provisions of this Agreement; |
| 5. | exercise any of its rights or remedies with respect to the Collateral after the termination of the Standstill Period to the extent permitted by Section 2.10; and |
| 6. | bid for or purchase Collateral at any public, private or judicial foreclosure upon such Collateral initiated by 1.5 Lien Agent or any other 1.5 Lien Creditor, or any sale of Collateral during an Insolvency Proceeding; provided that such bid may not include a “credit bid” in respect of any Second Lien Obligations unless the cash proceeds of such bid are otherwise sufficient to cause the discharge in full of the 1.5 Lien Obligations. |
| 19. | Conflicts. |
| 1. | Each party hereto acknowledges that it is bound by the provisions of the First Lien / Junior Lien Intercreditor Agreement, to the extent such agreement shall remain outstanding and in effect. In the event of any conflict between the provisions of this Intercreditor Agreement and the First Lien / Junior Lien Intercreditor Agreement, so long as the First Lien / Junior Lien Intercreditor Agreement shall remain outstanding and in effect, the provisions of the First Lien / Junior Lien Intercreditor Agreement shall govern and control. |
| 2. | In the event of any conflict between the provisions of this Intercreditor Agreement and the provisions of any Second Lien Document or any 1.5 Lien Documents, the provisions of this Intercreditor Agreement shall govern and control. |
28
| 3. | With respect to Second Lien Agent and the other Second Lien Creditors and the obligations of Second Lien Agent under the Second Lien Documents only, in the event of a conflict between this Intercreditor Agreement and the Second Lien Documents, the terms of the applicable Second Lien Documents shall govern and control. |
| 20. | If Second Lien Agent or any other Second Lien Creditor, in contravention of the terms of this Agreement, in any way takes, or attempts to or threatens to take, any action with respect to the Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement), or fails to take any action required by this Agreement, this Agreement shall create an irrebuttable presumption and admission by such Second Lien Agent or Second Lien Creditor that relief against such Second Lien Agent or Second Lien Creditor by injunction, specific performance and/or other appropriate equitable relief is necessary to prevent irreparable harm to the 1.5 Lien Creditors, it being understood and agreed by Second Lien Agent, on behalf of each Second Lien Creditor represented by it, that (i) the 1.5 Lien Lenders’ damages from actions of any Second Lien Creditor may at that time be difficult to ascertain and may be irreparable and (ii) each Second Lien Secured Party waives any defense that the Obligors and/or the 1.5 Lien Creditors cannot demonstrate damage and/or be made whole by the awarding of damages. |
[signature pages follow]
29
IN WITNESS WHEREOF, the parties have caused this Intercreditor Agreement to be duly executed as of the day and year first above written.
| 1.5 LIEN AGENT: | |||
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Collateral Agent under the 1.5 Lien Indenture, for itself and the other 1.5 Lien Creditors | |||
| By: | /s/ Christopher J. Grell | ||
| Name: | Christopher J. Grell | ||
| Title: | Vice President | ||
| SECOND LIEN AGENT: | |||
| TMI TRUST COMPANY, as Collateral Agent under the Second Lien Indenture, for itself and the other Second Lien Creditors | |||
| By: | /s/ Debra A. Schachel | ||
| Name: | Debra A. Schachel | ||
| Title: | President | ||
CURO Group Holdings Corp. –
1.5L v. 2L Intercreditor Agreement
Each of the undersigned hereby acknowledges and agrees to the foregoing terms and provisions. By its signature below, each of the undersigned agrees that it will, together with its successors and assigns, be bound by the provisions hereof.
Each of the undersigned agrees that any Creditor holding or otherwise controlling Collateral (the “Controlling Creditor”) does so as bailee (under the UCC) for and on behalf of the other Creditors which have a Lien on such Collateral, and each Controlling Creditor is hereby authorized to and may turn over to Second Lien Agent (if 1.5 Lien Agent or any 1.5 Lien Creditor is the Controlling Creditor) or to 1.5 Lien Agent (if Second Lien Agent or any Second Lien Creditor is the Controlling Creditor) any such Collateral upon request therefore, after all obligations and indebtedness of the undersigned to such Controlling Creditor shall have been fully paid and performed.
Each of the undersigned acknowledges and agrees that (i) although it may sign this Intercreditor Agreement it is not a party hereto and does not and will not receive any right, benefit, priority or interest under or because of the existence of the foregoing Intercreditor Agreement (except for a consent which is deemed to have been given by the Second Lien Creditors under Section 2.9), and (ii) it will execute and deliver such additional documents and take such additional action as may be necessary or desirable in the reasonable opinion of any of the Creditors to effectuate the provisions and purposes of the foregoing Intercreditor Agreement.
| CURO GROUP HOLDINGS CORP., | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | Chief Executive Officer | |
| CURO FINANCIAL TECHNOLOGIES CORP. | ||
| CURO INTERMEDIATE HOLDINGS CORP. | ||
| CURO MANAGEMENT LLC | ||
| SOUTHERNCO, INC. | ||
| FIRST HERITAGE CREDIT, LLC | ||
| FIRST HERITAGE CREDIT OF ALABAMA, LLC | ||
| FIRST HERITAGE CREDIT OF LOUISIANA, LLC | ||
| FIRST HERITAGE CREDIT OF MISSISSIPPI, LLC | ||
| FIRST HERITAGE CREDIT OF SOUTH CAROLINA, LLC | ||
| FIRST HERITAGE CREDIT OF TENNESSEE, LLC | ||
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
CURO Group Holdings Corp. –
1.5L v. 2L Intercreditor Agreement
Each of the undersigned hereby acknowledges and agrees to the foregoing terms and provisions. By its signature below, each of the undersigned agrees that it will, together with its successors and assigns, be bound by the provisions hereof.
Each of the undersigned agrees that any Creditor holding or otherwise controlling Collateral (the “Controlling Creditor”) does so as bailee (under the UCC) for and on behalf of the other Creditors which have a Lien on such Collateral, and each Controlling Creditor is hereby authorized to and may turn over to Second Lien Agent (if 1.5 Lien Agent or any 1.5 Lien Creditor is the Controlling Creditor) or to 1.5 Lien Agent (if Second Lien Agent or any Second Lien Creditor is the Controlling Creditor) any such Collateral upon request therefore, after all obligations and indebtedness of the undersigned to such Controlling Creditor shall have been fully paid and performed.
Each of the undersigned acknowledges and agrees that (i) although it may sign this Intercreditor Agreement it is not a party hereto and does not and will not receive any right, benefit, priority or interest under or because of the existence of the foregoing Intercreditor Agreement (except for a consent which is deemed to have been given by the Second Lien Creditors under Section 2.9), and (ii) it will execute and deliver such additional documents and take such additional action as may be necessary or desirable in the reasonable opinion of any of the Creditors to effectuate the provisions and purposes of the foregoing Intercreditor Agreement.
| CURO VENTURES, LLC | ||
| ATTAIN FINANCE, LLC | ||
| AD ASTRA RECOVERY SERVICES, INC. | ||
| CURO COLLATERAL SUB, LLC | ||
| CURO CREDIT, LLC | ||
| SOUTHERN FINANCE OF SOUTH CAROLINA, INC. | ||
| SOUTHERN FINANCE OF TENNESSEE, INC. | ||
| COVINGTON CREDIT, INC. | ||
| COVINGTON CREDIT OF GEORGIA, INC. | ||
| COVINGTON CREDIT OF ALABAMA, INC. | ||
| COVINGTON CREDIT OF TEXAS, INC. | ||
| HEIGHTS FINANCE HOLDING CO. | ||
| HEIGHTS FINANCE CORPORATION, an Illinois corporation | ||
| HEIGHTS FINANCE CORPORATION, a Tennessee corporation | ||
| QUICK CREDIT CORPORATION | ||
| By: | /s/ Gary L. Fulk | |
| Name: | Gary L. Fulk | |
| Title: | President | |
CURO Group Holdings Corp. –
1.5L v. 2L Intercreditor Agreement
Each of the undersigned hereby acknowledges and agrees to the foregoing terms and provisions. By its signature below, each of the undersigned agrees that it will, together with its successors and assigns, be bound by the provisions hereof.
Each of the undersigned agrees that any Creditor holding or otherwise controlling Collateral (the “Controlling Creditor”) does so as bailee (under the UCC) for and on behalf of the other Creditors which have a Lien on such Collateral, and each Controlling Creditor is hereby authorized to and may turn over to Second Lien Agent (if 1.5 Lien Agent or any 1.5 Lien Creditor is the Controlling Creditor) or to 1.5 Lien Agent (if Second Lien Agent or any Second Lien Creditor is the Controlling Creditor) any such Collateral upon request therefore, after all obligations and indebtedness of the undersigned to such Controlling Creditor shall have been fully paid and performed.
Each of the undersigned acknowledges and agrees that (i) although it may sign this Intercreditor Agreement it is not a party hereto and does not and will not receive any right, benefit, priority or interest under or because of the existence of the foregoing Intercreditor Agreement (except for a consent which is deemed to have been given by the Second Lien Creditors under Section 2.9), and (ii) it will execute and deliver such additional documents and take such additional action as may be necessary or desirable in the reasonable opinion of any of the Creditors to effectuate the provisions and purposes of the foregoing Intercreditor Agreement.
| ENNOBLE FINANCE, LLC | ||
| By: | Curo Intermediate Holdings Corp. | |
| Its: | Sole Member | |
| By: | /s/ Douglas D. Clark | |
| Name: | Douglas D. Clark | |
| Title: | President | |
CURO Group Holdings Corp. –
1.5L v. 2L Intercreditor Agreement
Exhibit 10.9
Dated as of May 12, 2023
among
CURO CANADA RECEIVABLES
II LIMITED PARTNERSHIP,
by its general partner,
CURO CANADA RECEIVABLES II GP INC.,
as Borrower
and
The Lenders Party Hereto
and
MIDTOWN MADISON MANAGEMENT LLC
as Administrative Agent
ASSET-BACKED REVOLVING CREDIT AGREEMENT
TABLE OF CONTENTS
| SECTION | PAGE | ||
| Article 1 DEFINITIONS | 1 | ||
| SECTION 1.01 | Defined Terms | 1 | |
| SECTION 1.02 | Terms Generally | 27 | |
| SECTION 1.03 | Accounting Terms; GAAP | 27 | |
| SECTION 1.04 | CDOR Fallback | 27 | |
| SECTION 1.05 | Limited Partnership | 31 | |
| Article 2 THE CREDITS | 31 | ||
| SECTION 2.01 | THE LOANS | 31 | |
| SECTION 2.02 | NOTES | 32 | |
| SECTION 2.03 | APPLICATION OF PROCEEDS | 32 | |
| SECTION 2.04 | USE OF PROCEEDS | 34 | |
| SECTION 2.05 | INTEREST | 34 | |
| SECTION 2.06 | ADVANCES | 36 | |
| SECTION 2.07 | Increased Commitments | 38 | |
| SECTION 2.08 | commitment REDUCTIONS AND PREPAYMENTS | 39 | |
| SECTION 2.09 | FEES | 40 | |
| SECTION 2.10 | Controlled Accounts | 41 | |
| SECTION 2.11 | Hedging PROCEEDS | 41 | |
| SECTION 2.12 | Increased Costs | 41 | |
| SECTION 2.13 | Withholding of Taxes; Gross-Up | 42 | |
| SECTION 2.14 | Payments Generally; Allocation of Proceeds; Sharing of Set-offs | 46 | |
| SECTION 2.15 | Mitigation Obligations; Replacement of Lender | 47 | |
| SECTION 2.16 | Defaulting Lender | 48 | |
| SECTION 2.17 | Returned Payments | 48 | |
| Article 3 Representations and Warranties. | 49 | ||
| SECTION 3.01 | Status and Authority | 49 | |
| SECTION 3.02 | Location | 49 | |
| SECTION 3.03 | Partnership Agreement | 49 | |
| SECTION 3.04 | Names | 49 | |
| SECTION 3.05 | Identification number | 49 | |
| SECTION 3.06 | Organization and powers | 49 | |
| SECTION 3.07 | Ownership Structure | 49 | |
| SECTION 3.08 | Authority; No conflict or violation | 50 | |
| SECTION 3.09 | Due execution | 50 | |
| SECTION 3.10 | Enforceability | 50 | |
| SECTION 3.11 | Compliance with laws, etc. | 50 | |
| SECTION 3.12 | Litigation | 51 | |
| SECTION 3.13 | Insolvency Event; Solvency | 51 | |
| SECTION 3.14 | Payments to applicable Sellers | 51 | |
| SECTION 3.15 | Sales not voidable | 51 | |
| SECTION 3.16 | Perfection | 51 | |
| SECTION 3.17 | Good title | 51 | |
| SECTION 3.18 | Bank accounts | 52 | |
| SECTION 3.19 | Control of Transaction Account | 52 | |
| SECTION 3.20 | No Material Event | 52 | |
| SECTION 3.21 | Accuracy of information | 52 | |
| SECTION 3.22 | Financial Statements | 52 | |
TABLE OF CONTENTS
| SECTION | PAGE | ||
| SECTION 3.23 | Taxes | 52 | |
| SECTION 3.24 | Tax status | 52 | |
| SECTION 3.25 | Volcker rule; Investment Company Act | 53 | |
| SECTION 3.26 | Anti-Money Laundering/International Trade Law Compliance | 53 | |
| SECTION 3.27 | Anti-Terrorism Laws | 53 | |
| SECTION 3.28 | Policies and procedures | 53 | |
| SECTION 3.29 | ERISA compliance and Canadian PENSION Plans | 53 | |
| SECTION 3.30 | Material Adverse Effect | 54 | |
| SECTION 3.31 | Good title | 54 | |
| SECTION 3.32 | Employees | 54 | |
| SECTION 3.33 | Receivables | 54 | |
| SECTION 3.34 | Data Protection | 55 | |
| Article 4 Conditions | 55 | ||
| SECTION 4.01 | Conditions to Effectiveness | 55 | |
| SECTION 4.02 | CONDITIONS TO ADVANCES | 57 | |
| Article 5 Covenants | 58 | ||
| SECTION 5.01 | Name or Structural Changes | 58 | |
| SECTION 5.02 | Business and Activities | 58 | |
| SECTION 5.03 | Partnership | 59 | |
| SECTION 5.04 | Separateness | 59 | |
| SECTION 5.05 | Compliance with Laws | 60 | |
| SECTION 5.06 | Policies and Procedures | 60 | |
| SECTION 5.07 | Authorizations | 60 | |
| SECTION 5.08 | Records | 60 | |
| SECTION 5.09 | Performance and enforcement of the Sale and Servicing Agreement | 61 | |
| SECTION 5.10 | Ownership | 61 | |
| SECTION 5.11 | Sales, Liens | 61 | |
| SECTION 5.12 | Termination of Sale and Servicing Agreement | 62 | |
| SECTION 5.13 | Indebtedness | 62 | |
| SECTION 5.14 | Tax Status | 62 | |
| SECTION 5.15 | Taxes | 62 | |
| SECTION 5.16 | Use of Proceeds | 62 | |
| SECTION 5.17 | Anti-Terrorism Laws: | 62 | |
| SECTION 5.18 | Further information/Assurances | 62 | |
| SECTION 5.19 | Financial Statements; Borrowing Base and Other Information | 63 | |
| SECTION 5.20 | Notices of Material Events | 64 | |
| SECTION 5.21 | Existence; Conduct of Business | 64 | |
| SECTION 5.22 | Payment of Obligations | 65 | |
| SECTION 5.23 | Books and Records; Inspection Rights | 65 | |
| SECTION 5.24 | Compliance with Laws and Material Contractual Obligations | 65 | |
| SECTION 5.25 | Accuracy of Information | 66 | |
| SECTION 5.26 | Indebtedness | 66 | |
| SECTION 5.27 | Liens | 66 | |
| SECTION 5.28 | Fundamental Changes | 66 | |
| SECTION 5.29 | Non-Consolidation | 66 | |
| SECTION 5.30 | Disposals | 66 | |
| SECTION 5.31 | SWAP AGREEMENTS | 67 | |
ii
TABLE OF CONTENTS
| SECTION | PAGE | ||
| SECTION 5.32 | Restricted Payments | 67 | |
| SECTION 5.33 | Restrictive Agreements | 67 | |
| SECTION 5.34 | Amendment of Organizational Documents | 67 | |
| SECTION 5.35 | Partnership CORPORATE Covenants | 67 | |
| SECTION 5.36 | Administrative Agent Instructions | 68 | |
| SECTION 5.37 | records | 69 | |
| SECTION 5.38 | Data Protection | 70 | |
| SECTION 5.39 | Seller Collections Accounts Blocked Account Agreement | 70 | |
| SECTION 5.40 | Securitization transactions | 71 | |
| SECTION 5.41 | General Partner Board Composition | 72 | |
| SECTION 5.42 | PARENT GUARANTOR-RELATED COVENANTS | 72 | |
| SECTION 5.43 | Financial Covenant Amendment | 73 | |
| SECTION 5.44 | Back-up Servicing and Verification Agency Agreement | 73 | |
| Article 6 Events of Default, Amortization Events and Re-Direction Events | 73 | ||
| SECTION 6.01 | EVENTS OF DEFAULT | 73 | |
| SECTION 6.02 | AMORTIZATION EVENTS | 77 | |
| SECTION 6.03 | Re-Direction Events | 77 | |
| Article 7 The Administrative Agent | 78 | ||
| SECTION 7.01 | Appointment | 78 | |
| SECTION 7.02 | Rights as a Lender | 78 | |
| SECTION 7.03 | Duties and Obligations | 79 | |
| SECTION 7.04 | Reliance | 79 | |
| SECTION 7.05 | Actions through Sub-Agents | 79 | |
| SECTION 7.06 | Resignation | 80 | |
| SECTION 7.07 | Non-Reliance | 80 | |
| SECTION 7.08 | Not Partners or Co-Venturers; Administrative Agent as Representative of the Secured Parties | 81 | |
| SECTION 7.09 | NO SERVICES IN CANADA | 81 | |
| Article 8 Miscellaneous | 82 | ||
| SECTION 8.01 | Notices | 82 | |
| SECTION 8.02 | Waivers; Amendments | 83 | |
| SECTION 8.03 | Expenses; Indemnity; Damage Waiver | 85 | |
| SECTION 8.04 | Successors and Assigns | 88 | |
| SECTION 8.05 | Survival | 91 | |
| SECTION 8.06 | Counterparts; Integration; Effectiveness; Electronic Execution | 91 | |
| SECTION 8.07 | Severability | 92 | |
| SECTION 8.08 | Right of Setoff | 92 | |
| SECTION 8.09 | Governing Law; Jurisdiction; Consent to Service of Process | 92 | |
| SECTION 8.10 | WAIVER OF JURY TRIAL | 93 | |
| SECTION 8.11 | Confidentiality | 93 | |
| SECTION 8.12 | Several Obligations; Non-reliance; Violation of Law | 94 | |
| SECTION 8.13 | USA PATRIOT Act | 94 | |
| SECTION 8.14 | Disclosure | 94 | |
| SECTION 8.15 | Appointment for Perfection | 94 | |
| SECTION 8.16 | Interest Rate Limitation | 95 | |
| SECTION 8.17 | No Advisory or Fiduciary Responsibility | 95 | |
iii
TABLE OF CONTENTS
| SECTION | PAGE | ||
| SECTION 8.18 | Acknowledgement and Consent to Bail-In of EEA Financial Institutions | 95 | |
| SECTION 8.19 | Judgment Currency Conversion | 96 | |
| SECTION 8.20 | Canadian Anti-Money Laundering Legislation | 96 |
| SCHEDULE 1 COMMITMENT SCHEDULE | |||
| SCHEDULE 2 BORROWER OWNERSHIP STRUCTURE | |||
| SCHEDULE 3 SELLER COLLECTIONS ACCOUNTS | |||
| SCHEDULE 4 FORM OF BORROWING REQUEST | |||
| EXHIBIT A ASSIGNMENT AND ASSUMPTION | |||
| EXHIBIT B FORM OF BORROWING BASE CERTIFICATE | |||
| EXHIBIT C FORM OF REPAYMENT NOTICE | |||
| EXHIBIT D-1 U.S. TAX COMPLIANCE CERTIFICATE | |||
| EXHIBIT D-2 U.S. TAX COMPLIANCE CERTIFICATE | |||
| EXHIBIT D-3 U.S. TAX COMPLIANCE CERTIFICATE | |||
| EXHIBIT D-4 U.S. TAX COMPLIANCE CERTIFICATE |
iv
This CREDIT AGREEMENT is made as of May 12, 2023 (this "Agreement") among CURO Canada Receivables II Limited Partnership, as the Borrower, the Lenders party hereto and Midtown Madison Management LLC, as the Administrative Agent.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the covenants and agreements of the parties herein contained and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each of the parties), the parties hereby covenant and agree as follows:
Article 1
DEFINITIONS
| SECTION 1.01 | Defined Terms. |
As used in this Agreement and the other Transaction Documents, the following terms have the meanings specified below:
"Actual Loss Rate" means, at any time, the Default Ratio at such time, multiplied by 12.
"Administrative Agent" means Midtown Madison Management LLC, as investment manager on behalf of one or more investment management clients, in its capacity as administrative agent for the Lenders hereunder, and its successors in such capacity as provided in Article 7.
"Administrative Agent Fee" means the fee pursuant to SECTION 2.09(d).
"Administrative Agent Fee Amount" has the meaning given to such term in the Fee Letter.
"Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent.
"Advance" means each advance of the Loans made to the Borrower pursuant to SECTION 2.01.
"Advance Amount" means the amount equal to (i) the applicable Advance Rate, multiplied by (ii) the excess of (A) the Aggregate Eligible Pool Balance, over (B) the Aggregate Outstanding Balance of Pending Eligible Receivables.
"Advance Rate" means, with respect to any Receivable, 80%, provided that if a Level 1 Collateral Trigger has occurred, the Advance Rate shall be reduced to 75%.
"Adverse Claim" means a security interest, lien, mortgage, charge, pledge, assignment, title retention, hypothec, encumbrance, ownership interest or other right or claim, including any filing or registration made in respect thereof, of or through any Person (other than the Borrower or the Administrative Agent).
"Affiliate" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person.
"Agent Indemnitee" has the meaning assigned to such term in SECTION 8.03(e).
"Aggregate Eligible Pool Balance" means the number equal to (i) the Aggregate Outstanding Balance of all Purchased Receivables owned by the Borrower, less (ii) the Excess Portfolio Amounts.
"Aggregate Exposure" means, at any time, the aggregate Exposure of all the Lenders at such time.
1
"Aggregate Outstanding Balance" means, as of any date of determination, with respect to all, or such specified portion, of the Receivables (as the context requires), the sum of the aggregate of the Outstanding Balance of all, or such specified portion, of the Receivables as of such date of determination.
"AML Legislation" has the meaning assigned to such term in SECTION 8.20.
"Amortization Date" has the meaning assigned to such term in SECTION 6.02.
"Amortization Event" means the occurrence of any of the following events:
| (a) | at the discretion of the Administrative Agent, an Uncured Level 2 Verification Trigger Event; |
| (b) | a Level 2 Collateral Trigger; |
| (c) | an Event of Default; and |
| (d) | a Level 2 Regulatory Trigger Event, |
provided that an Amortization Event in respect of the event in clause (b) above shall be deemed to occur on the Reporting Date in respect of such Collection Period.
"Anti-Corruption Laws" means all laws, rules, and regulations of any jurisdiction applicable to the Borrower from time to time concerning or relating to bribery or corruption.
"Anti-Terrorism Laws" means any applicable laws relating to terrorism or money laundering including Executive Order No. 13224, the USA Patriot Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC and other laws administered by the U.S. Department of the Treasury Financial Crimes Enforcement Network, and the Canadian Anti-Money Laundering & Anti-Terrorism Legislation (as any of the foregoing laws may from time to time be amended, renewed, extended, or replaced).
"Applicable Law" means all applicable federal, provincial, state, territorial and local laws, statutes, regulations, rules, executive orders, supervisory requirements, directives, guidelines, circulars, opinions, codes of conduct, decisions, rulings, advisories, bulletins, interpretive letters, and other official releases customarily considered to be binding of or by any government, or any authority, department, or agency thereof (including, in the case of tax matters, all specific proposals to amend the ITA publicly announced by or on behalf of the Minister of Finance (Canada)), as now and hereafter in effect.
"Applicable Percentage" means, with respect to the Lenders, a percentage equal to a fraction the numerator of which is such Lender's Commitment and the denominator of which is the aggregate Commitments (provided that, if the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such Lender's share of the Aggregate Exposure at that time); provided further that, in accordance with SECTION 2.16, so long as any Lender shall be a Defaulting Lender, such Defaulting Lender's Commitment shall be disregarded in the calculations above.
"Applicable Rate" has the meaning assigned to such term in the Fee Letter.
"Approved Fund" has the meaning assigned to such term in SECTION 8.04.
"Assignment and Assumption" means an assignment and assumption agreement entered into by any Lender and an assignee (with the consent of any party whose consent is required by SECTION 8.04), and accepted by the Administrative Agent, in the form of EXHIBIT A or any other form approved by the Administrative Agent.
2
"Availability Period" means the period from and including the Effective Date to but excluding the earliest to occur of the Revolving Period End Date, an Amortization Event, a Level 1 Regulatory Trigger Event (provided that if the relevant Regulatory Action is released or terminated in a manner acceptable to the Administrative Agent, acting reasonably, then a Level 1 Regulatory Trigger Event shall no longer be considered to have occurred and the Availability Period shall be reinstated), at the discretion of the Administrative Agent, an Uncured Level 1 Verification Trigger Event, and the Maturity Date.
"Available Amount" has the meaning assigned to such term in SECTION 2.03.
"Back-up Servicer" means SST Office Services Inc. and any successor thereto pursuant to the Back-up Servicing and Verification Agency Agreement.
"Back-up Servicing and Verification Agency Agreement" means the Back-up Servicing and Verification Agency Agreement entered into or to be entered into among the Servicers, the Back-up Servicer, the Administrative Agent and the Borrower, including any amendment, restatement, supplement or replacement thereof.
"Back-up Servicing Fee" means the fees owing to the Back-up Servicer pursuant to the Back-up Servicing and Verification Agency Agreement.
"Bail-In Action" means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
"Bail-In Legislation" means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
"Billing Statement" has the meaning assigned to such term in SECTION 2.14(e).
"Blocked Person" means (i) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; (ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; (iii) a Person with which any Lender is prohibited from dealing with or otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) a Person that commits, threatens or conspires to commit or supports "terrorism" as defined in the Executive Order No. 13224; (v) a Person that is named as a "specially designated national" on the most current list published by OFAC at its official website or any replacement website or other replacement official publication of such list; or (vi) a Person who a parent or Subsidiary of a Person listed above.
"Board" means the Board of Governors of the Federal Reserve System of the U.S.
"Borrower" means CURO Canada Receivables II Limited Partnership, a limited partnership formed under the laws of Ontario, by its general partner, CURO Canada Receivables II GP Inc.
"Borrower Parties" means, collectively, the Credit Parties and the CURO Entities, and "Borrower Party" means any one of them.
"Borrower Party Plan" means each Plan that is established or maintained by any Borrower Party or any ERISA Affiliate thereof, or to which any Borrower Party or ERISA Affiliate thereof contributes, is obligated to contribute, or has any liability.
"Borrowing Base" means, as at any date of determination, the amount equal to (a) the relevant Advance Amount, plus (b) all Collections and other cash proceeds in the Transaction Account at such time, minus (c) any amounts payable on the next Monthly Settlement Date pursuant to SECTION 2.03(a) and SECTION 2.03(b).
3
"Borrowing Base Certificate" means a certificate, signed and certified as accurate and complete by a senior officer of the General Partner (in its capacity as general partner of the Borrower), in substantially the form of EXHIBIT B or another form which is acceptable to the Administrative Agent in its sole discretion.
"Borrowing Base Deficiency" means, as at any determination date, the amount by which the Aggregate Exposure exceeds the lower of (i) the Borrowing Base and (ii) the aggregate Commitments.
"Borrowing Date" means, in respect of each Advance, the date specified as such in the Borrowing Request applicable to such Advance.
"Borrowing Request" means a request by the Borrower for an Advance in accordance with SECTION 2.01 in the form set out in Schedule 4.
"Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in Toronto, Ontario and New York City, New York are authorized or required by law to remain closed.
"CAD" or "Canadian Dollars" or "Dollars" or "$" means the lawful currency of Canada.
"Canadian Anti-Money Laundering & Anti-Terrorism Legislation" means the Criminal Code, R.S. 1985, C-46, The Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S. 2000, 17 and the United Nations Act, R.S. 1985, U-2 or any similar Canadian legislation, together with all rules, regulations and interpretations thereunder or related thereto including, without limitation, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism and the United Nations Al-Qaida and Taliban Regulations promulgated under the United Nations Act.
"Canadian Pension Plan" means any pension plan organized under the laws of Canada or any province thereof.
“Cash” means money, currency or a credit balance in any demand, securities account or deposit account; provided, however, that notwithstanding anything to the contrary contained herein, “Cash” shall exclude any amounts that would not be considered “cash” under GAAP.
"Cash Equivalents" means, as of any day, (a) marketable securities (i) issued or directly and unconditionally guaranteed as to interest and principal by the United States government or the Canadian government or (ii) issued by any agency of the United States or Canada the obligations of which are backed by the full faith and credit of the United States or Canada, in each case maturing within one (1) year after such day; (b) marketable direct obligations issued by any State or Province of the United States or Canada, as the case may be, or any political subdivision of any such State or any Province, as the case may be, or public instrumentality thereof, in each case maturing within one (1) year after such day and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (c) 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; (d) certificates of deposit or bankers’ acceptances maturing within one (1) year after such day and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States or any state thereof, the District of Columbia, Canada or any Province thereof that (i) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (ii) has Tier 1 capital (as defined in such regulations) of not less than One Hundred Million Dollars ($100,000,000); and (e) shares of any money market mutual fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not less than Five Hundred Million Dollars ($500,000,000) and (iii) has the highest rating obtainable from either S&P or Moody’s.
"CDOR" means, on any day, an annual rate of interest equal to the three (3) month Canadian Dollar Offered Rate quoted by Refinitiv Benchmarks Services (UK) Limited as at approximately 10:20 AM (Toronto time) on such day, or if such day is not a Business Day, then on the immediately preceding Business Day; provided that:
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| (a) | subject to Section 1.04, if such rate is not quoted on such day as contemplated, then CDOR on such day shall be calculated as the annual interest rate for such period offered by the Administrative Agent for commercial loans or other extensions of credit to businesses of comparable credit risk to the Borrower; and |
| (b) | if such rate is less than the Floor then CDOR shall be deemed to be the Floor. |
"Change of Control" means the occurrence of any of the following:
| (a) | the direct or indirect sale, conveyance, transfer, lease or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Parent Guarantor and its Subsidiaries, taken as a whole, to any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act); |
| (b) | the adoption of a plan relating to the liquidation or dissolution of the Parent Guarantor; |
| (c) | the consummation of any transaction (including any merger or consolidation) the result of which is that any "person" (as defined above) becomes the "beneficial owner" (as such term is defined in Rules 13d-3 and 13d-5 under the Exchange Act), except that for purposes of this clause (c) such person shall be deemed to have "beneficial ownership" of all shares that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time, directly or indirectly, of more than 50% of the voting stock of the Parent Guarantor; |
| (d) | the first day on which a majority of the members of the Board of Directors of the Parent Guarantor and CURO Intermediate Holdings Corp. are not Continuing Directors; or |
| (e) | the first day on which the Parent Guarantor ceases to "beneficially own" (as defined above) 100% of the outstanding voting stock of any other Borrower Party. |
"Change in Law" means the occurrence after the date of this Agreement (or, with respect to any Lender, such later date on which such Lender becomes a party to this Agreement) of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) compliance by any Lender (or, for purposes of SECTION 2.12(b), by any lending office of such Lender or by such Lender's holding company, if any) with any request, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (d) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (e) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a "Change in Law", regardless of the date enacted, adopted, issued or implemented.
"Charged-Off Receivable" means any Receivable which remains unpaid for more than ninety (90) days from the original due date for such payment or otherwise has been or should have been charged-off or identified by the Servicers as uncollectable in accordance with the Credit and Collection Policies.
"Charges" has the meaning assigned to such term in SECTION 8.16.
"Chattel Paper" has the meaning assigned to such term in the General Security Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
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"Closing Date" means May 12, 2023.
"Closing Payment" means, with respect to any Purchase, the Closing Payment as set out in the relevant Purchase Notice.
"Collateral" means any and all property owned, leased or operated by a Credit Party and any and all other property of the Borrower, now existing or hereafter acquired, that may at any time be, become or be intended to be, subject to a security interest or Lien in favour of the Administrative Agent, on behalf of itself and the Lenders and other Secured Parties, to secure the Secured Obligations.
"Collateral Trigger Event" means the occurrence of a Level 1 Collateral Trigger, a Level 2 Collateral Trigger or a Level 3 Collateral Trigger.
"Collection Period" means the period from, and including, the first day of any calendar month to, and including, the last day of such calendar month.
"Collections" means, with respect to any Receivable, (a) all cash collections and other cash proceeds of such Receivable and (b) all cash proceeds in the Related Rights for such Receivable, in each case including, but not limited to, principal, interest, fees, liquidation proceeds, payments received in connection with Insurance and proceeds from Insurance.
"Commitment Schedule" means the Schedule attached hereto identified as such.
"Commitment" means, with respect to each Lender, such Lender's commitment to make Loans hereunder, expressed as an amount representing the maximum possible aggregate amount of such Lender's Exposure hereunder, as such commitment may be reduced from time to time pursuant to (a) SECTION 2.08 and (b) assignments by or to such Lender pursuant to SECTION 8.04. The initial amount of each Lender's Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.
"Communications" has the meaning assigned to such term in SECTION 8.01(d).
"Confidential Personal Information" means any and all information or data protected by Privacy Laws, including (without limitation) information or data that: (a) is personal information or information about an identifiable individual (as more particularly defined in the applicable Privacy Laws) that was collected, used, disclosed or accessible to the Sellers or the Servicers; or (b) is information from which an individual or individual's identity can be ascertained either from the information itself or by combining the information with information from other sources available to the parties.
"Connection Income Taxes" means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
"Continuing Director" means, as of any date of determination, any member of the Board of Directors of the Parent Guarantor and CURO Intermediate Holdings Corp. (as applicable) who (1) was a member of such Board of Directors on the date of this Agreement or (2) was nominated for election or elected to such Board of Directors with the approval, recommendation or endorsement of a majority of the directors who were members of such Board of Directors on the date of this Agreement or whose nomination or election to the Board of Directors was previously so approved.
"Control" means, other than in the case of SECTION 3.19, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
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"Control Agreement" means a deposit account control agreement, blocked account control agreement or securities account control agreement, as applicable, with an institution with which any applicable Credit Party maintains any deposit account or securities account, in each case in form and substance satisfactory to the Administrative Agent.
"Cost of Funds" means, with respect to any Collection Period, a percentage equal to (i) the sum of any interest and fee amounts payable under SECTION 2.03(b), divided by (ii) the Aggregate Outstanding Balance of all Purchased Receivables as of the last day of such Collection Period; and such resulting quotient multiplied by (iii) twelve.
"Credit and Collection Policies" means, with respect to the Sellers, the applicable credit and collection and risk underwriting policies for the Receivables as in effect on the Closing Date and approved by the Lenders, namely the documents entitled:
| (a) | Internet Lending Credit Policy – CURO Canada; |
| (b) | Brick and Mortar Credit Policy – CURO Canada; |
| (c) | Internet Lending Credit Policy – LendDirect; |
| (d) | Risk and Analytics Approval Procedures, dated November 2019; |
| (e) | Contact Centre P&P – Recovery Department Only, dated October 27, 2022; and |
| (f) | Due Date Changes – Line of Credit Loans, |
as scheduled in Schedule D to the Sale and Servicing Agreement, as amended, replaced or supplemented from time to time to the extent permitted under the Transaction Documents.
"Credit Parties" means, collectively, the General Partner and the Borrower, and "Credit Party" means either of them.
"Credit Vision Score" means a credit score determined using analytics developed by Trans Union of Canada, Inc. and commonly referred to as a Credit Vision Score.
"CURO Entities" means, collectively, the Parent Guarantor, CURO Financial Technologies Corp. CURO Intermediate Holdings Corp., CURO Management LLC (NV) and each Seller, and "CURO Entity" means any one of them.
"Customer Data" means all data and information supplied or provided or made available directly or indirectly to the Sellers and the Servicers by Obligors, including: (a) Confidential Personal Information; (b) the customer data of the Sellers and the Servicers, (c) the result of the processing of any such data, or data that is generated or derived or collected in any connection with the origination and servicing of the Receivables; and (d) all such data and information of the Sellers' or the Servicers' contractors, agents or other third parties.
"Cut-off Date" means, with respect to any Purchase, the Cut-off Date as set out in the relevant Purchase Notice.
"Daily Minimum Utilization Shortfall Amount" means, on any date of determination, the positive difference (if any) between the Minimum Utilization Threshold on such date and of the aggregate Advances outstanding on such date.
"Data Requirements" means Privacy Laws applicable to the Sellers' and the Servicers' conduct of business, all agreements to which it is bound, and all internal or customer-facing policies of the Sellers and the Servicers, in each case with respect to collection, use, storage, transfer, privacy, protection, or security of information.
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"Default" means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning assigned to such term in the Fee Letter.
"Default Ratio" means, at any time, the weighted average (expressed as a percentage) of the ratios for each of the two immediately preceding Collection Periods computed by dividing, in respect of each such Collection Period, (a) the Aggregate Outstanding Balance as at the end of the last day of the applicable Collection Period, of all Purchased Receivables that were Defaulted Receivables as at the end of such day, by (b) the Aggregate Outstanding Balance of all Purchased Receivables as at the end of such day.
"Defaulted Receivable" means a Receivable: (a) as to which the Obligor thereof is Insolvent, (b) which became or should have become charged-off or identified by the Servicers as uncollectable in accordance with the Credit and Collection Policies, or (c) as to which any payment, or part thereof, remains unpaid for more than sixty (60) days and less than ninety-one (91) days from the original due date for such payment.
"Defaulting Lender" means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans or (ii) pay over to any Finance Party any other amount required to be paid by it hereunder or any other Loan Document, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender's good faith determination that a condition precedent to funding (specifically identified and including the particular Default, if any) has not been satisfied, (b) has notified the Borrower or any Finance Party in writing, or has made a public statement, to the effect that it does not intend or expect to comply with any of its funding obligations under this Agreement or any other Loan Document (unless such writing or public statement indicates that such position is based on such Lender's good faith determination that a condition precedent (specifically identified and including the particular Default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Finance Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Finance Party's receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become Insolvent.
"Delinquency Ratio" means, at any time, the weighted average (expressed as a percentage) of the ratios for each of the two immediately preceding Collection Periods computed by dividing, in respect of each such Collection Period, (a) the Aggregate Outstanding Balance as at the end of the last day of the applicable Collection Period, of all Purchased Receivables that were Delinquent Receivables but not Defaulted Receivables as at the end of such day, by (b) the Aggregate Outstanding Balance of all Purchased Receivables as at the end of such day.
"Delinquent Receivable" means a Receivable as to which any payment, or part thereof, remains unpaid for more than thirty (30) days and less than sixty-one (61) days from the original due date for such payment.
"Designated Credit Reporting Agency" means each of Equifax, Experian and TransUnion.
"Discrepancy Ratio" means the ratio computed by dividing (a) the total number of Receivables in a Loan Data Tape reviewed by the Verification Agent in a verification period pursuant to the Back-up Servicing and Verification Agency Agreement containing discrepancies, by (b) the total number of Receivables in a Loan Data Tape reviewed by the Verification Agent in that verification period pursuant to the Back-up Servicing and Verification Agency Agreement, as indicated in any Verification Certificate (as defined in the Back-up Servicing and Verification Agency Agreement).
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"EEA Financial Institution" means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a Subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
"EEA Member Country" means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
"EEA Resolution Authority" means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
"Effective Date" means the date on which the conditions specified in SECTION 4.01 are satisfied (or waived in accordance with SECTION 8.02).
"Electronic Signature" means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.
"Electronic System" means any electronic system, including e-mail, e-fax, web portal access for the Borrower, Intralinks®, ClearPar®, Debt Domain, Syndtrak and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent and any of its Related Parties or any other Person, providing for access to data protected by passcodes or other security system.
"Eligible Receivable" means, as at the date of determination, Receivables (net of unearned interest, fees, unearned discounts, insurance commissions, reserves and holdbacks thereon) that are Receivables designated as Line of Credit Loan Receivables, and which meet the following criteria: [* * * * *].
"Equity Interests" means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated) that, together with a Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) the failure to satisfy the "minimum funding standard" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent within the meaning of Section 4245 of ERISA, or is in critical or endangered status within the meaning of Section 432 of the Code.
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"ESG Issue" means a finding (including a finding by regulatory or law enforcement agencies) that any Borrower Party has materially violated any law or regulation relating to: protection of the environment; worker safety; fair wages and working conditions; collective bargaining; unlawful discrimination; child or forced labor; bribery or corruption; consumer, patient or tenant protection or privacy; fair lending or fair debt collection practices; product or drug safety; or taxation.
"EU Bail-In Legislation Schedule" means the "EU Bail-In Legislation Schedule" published by the Loan Market Association (or any successor Person), as in effect from time to time.
"Events of Default" has the meaning assigned to such term in Article 6, and "Event of Default" means any such event.
"Excess Portfolio Amount" means, at any time of determination, the Aggregate Outstanding Balance by which the Purchased Receivables exceed or do not qualify under the relevant Portfolio Limits at such time.
"Excess Spread Percentage" means, at any time, the weighted average (expressed as a percentage) of the percentage computed for each of the two immediately preceding Collection Periods equal to the Portfolio Yield less the Actual Loss Rate less the Cost of Funds less Servicing Cost less the Insurance Cost Yield, in each case as at the end of such Collection Period.
"Excluded Taxes" means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, or on account of any obligation of a Borrower Party, under any Loan Document: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) any Taxes imposed pursuant to the ITA as a result of the Recipient (i) not dealing at arm's length (within the meaning of the ITA) with a Borrower Party, (ii) being a "specified non-resident shareholder" (as defined in subsection 18(5) of the ITA) of a Borrower Party or of a member of the Borrower, or not dealing at arm's length (within the meaning of the ITA) with a "specified shareholder" (as defined in subsection 18(5) of the ITA) of a Borrower Party or of a member of the Borrower, or (iii) being a "specified entity" (as defined in subsection 18.4(1) of the ITA, as it is proposed to be amended by certain Tax proposals released by the Department of Finance (Canada) on April 29, 2022) in respect of a Borrower Party (except in the case of (i) through (iii), where (x) the non-arm's length relationship, (y) the Recipient being a "specified non-resident shareholder" of a Borrower Party or of a member of the Borrower, or not dealing at arm's length with a "specified shareholder" of a Borrower Party or of a member of the Borrower, or (z) the Recipient being a "specified entity" in respect of a Borrower Party, as applicable, arises in connection with or as a result of the Recipient having become a party to, received or perfected a security interest under or received or enforced any rights under, a Loan Document); (c) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under SECTION 2.15(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to SECTION 2.13, amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender acquired the applicable interest in a Loan or Commitment or to such Lender immediately before it changed its lending office; (d) U.S. federal and Canadian withholding Taxes attributable to such Recipient's failure to comply with SECTION 2.13(d) or SECTION 2.13(f), and (e) any U.S. federal withholding Taxes imposed under FATCA.
"Exit Additional Interest" means (i) during the period from the Closing Date to the end of the eighteenth (18th) month following the Closing Date, the Make Whole Amount, (ii) during the period from the beginning of the nineteenth (19th) month following the Closing Date to the end of the twenty-fourth (24th) month following the Closing Date, an amount equal to one and a half percent (1.5%) of the aggregate Commitments, and (iii) during and after the 25th month following the Closing Date, zero.
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"Expenses Cap" means, with respect to a period consisting of twelve (12) consecutive Monthly Settlement Dates, $100,000 per annum.
"Exposure" means, with respect to any Lender at any time, the outstanding principal amount of such Lender's Loans at such time.
"FATCA" means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code.
"Fee Letter" means the fee letter dated on or about the date hereof between the Administrative Agent and the Borrower in respect of the determination of the Administrative Agent Fee Amount, the Applicable Rate, the Unused Additional Interest Rate and the Original Issue Discount Rate, as such fee letter may be amended, restated, supplemented, replaced or otherwise modified from time to time.
"FICO Score" means a credit score determined using analytics developed by the Fair Isaac Corporation and commonly referred to as a FICO Score.
"Finance Parties" means the Administrative Agent and the Lenders.
"Financing Assignment Designation" means a designation of Purchased Assets as assets to be sold on a specified date by the Borrower in connection with any Securitization Transaction in accordance with SECTION 5.40.
"Financing Assignment Designation Cut-Off Date" means, in respect of any Financing Assignment Designation, the cut-off date specified as such in the related Financing Transaction Notice.
"Financing Transaction Notice" has the meaning given to such term in SECTION 5.40.
"Financing Transaction Prepayment Amount" has the meaning given to such term in SECTION 5.40.
"Financing Transaction Release List" has the meaning given to such term in SECTION 5.40.
"Floor" means a rate of interest equal to 3.00%.
"Foreign Lender" means (a) if a Borrower is a U.S. Person, a Lender, with respect to the Borrower, that is not a U.S. Person, and (b) if a Borrower is not a U.S. Person, a Lender, with respect to the Borrower, that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.
"Foreign Plan" means any benefit plan that is maintained or is contributed to by any Borrower Party that, under the applicable Law of any jurisdiction other than the United States, is required to be funded through a trust or other funding vehicle other than a trust or funding vehicle maintained exclusively by a Governmental Authority.
"GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
"General Partner" means CURO Canada Receivables II GP Inc. and any successor or permitted assignee thereof.
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"General Security Agreement" means that certain security agreement (including any and all supplements thereto), dated as of the Effective Date, among the Borrower, the General Partner and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, and any other pledge or security agreement governed by the laws of a province or territory of Canada entered into, after the date of this Agreement by the Borrower and the General Partner (as required by this Agreement or any other Loan Document) or any other Person for the benefit of the Administrative Agent and the other Secured Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.
"Governmental Authority" means the government of the U.S., Canada, any other nation or any political subdivision thereof, whether state, provincial, territorial, or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guarantee issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
"Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guarantee, (i) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances and (j) obligations in respect of any earn-out obligation for which the payment amount is capable of being determined or for which the obligation is evidenced by a promissory or similar instrument. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by, or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in subsection (a), Other Taxes.
"Indemnitee" has the meaning assigned to such term in SECTION 8.03(b).
"Industry Regulatory Action" means any inquiry, investigation, legal action or proceeding by any Governmental Authority alleging any noncompliance by any member of the consumer credit industry with such jurisdiction's applicable consumer credit laws or insurance laws as a result of a method, practice, action, inaction, condition, event or circumstance that is consistent in all material respects with the same or any similar method, practice, action, inaction, condition, event or circumstance engaged in by or applicable to any Borrower Party or any third party engaged by any Borrower Party.
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"Ineligible Institution" has the meaning assigned to such term in SECTION 8.04(b).
"Information" has the meaning assigned to such term in SECTION 8.11.
"Initial Servicers" means CURO Canada Corp. and LendDirect Corp. (Canada) and "Initial Servicer" means any of them.
"Insolvency Event" means the occurrence of any of the following:
| (a) | a Credit Party or the Parent Guarantor shall: |
| (i) | apply for or consent to the appointment of, or the taking of possession by a receiver, interim receiver, receiver and manager, monitor, custodian, administrator, trustee, liquidator or other similar official for itself or any other Credit Party or the Parent Guarantor or for all or any substantial part of its or any other Credit Party's or the Parent Guarantor's assets; |
| (ii) | commit an act of bankruptcy; |
| (iii) | make a general assignment for the benefit of creditors, or otherwise commence or consent to the commencement of proceedings under the Bankruptcy and Insolvency Act (Canada) (including proceedings in connection with any proposal or notice of intention to make a proposal thereunder), the Companies' Creditors Arrangement Act (Canada) or under any other Insolvency Law, or consent to any orders sought in any such proceedings, in each case in respect of any Credit Party or the Parent Guarantor or any of their respective property; |
| (iv) | take any corporate or partnership action to authorize, or expressly state any intention to take, any of the actions described in (i) through (iii) above; or |
| (v) | (A) be unable to meet its obligations as they generally become due, (B) cease paying its current obligations in the ordinary course of business as they generally become due, (C) cease to have property that, at a fair valuation, is sufficient, or, if disposed of at a fairly conducted sale under legal process, would be sufficient to enable payment of all of its obligations, due and accruing due, or (D) admit in writing that any of (A) through (C) have occurred in respect of any Credit Party or the Parent Guarantor; |
| (b) | a receiver, interim receiver, receiver and manager, monitor, custodian, administrator, trustee, liquidator or other similar official is appointed over a Credit Party or the Parent Guarantor or over all or any substantial part of a Credit Party's or the Parent Guarantor's assets; or |
| (c) | in respect of any Credit Party or the Parent Guarantor, an involuntary proceeding shall be commenced seeking: (A) to adjudicate any Credit Party or the Parent Guarantor a bankrupt or insolvent; (B) relief in respect of any Credit Party or the Parent Guarantor or a substantial part of such Credit Party's or the Parent Guarantor's assets under the Bankruptcy and Insolvency Act (Canada) (including proceedings in connection with any proposal thereunder), the Companies' Creditors Arrangement Act (Canada) or any other Insolvency Law; or (C) the appointment of a receiver, trustee, custodian, liquidator or similar official for any Credit Party or the Parent Guarantor or any substantial part of such Credit Party's or the Parent Guarantor's property. |
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"Insolvency Law" means the Companies' Creditors Arrangement Act (Canada), Bankruptcy and Insolvency Act (Canada), Winding-up and Restructuring Act (Canada), the Limited Partnerships Act (Ontario) and all other winding-up, liquidation, dissolution, conservatorship, bankruptcy, moratorium, protection, composition, arrangement, receivership, insolvency, reorganization, or similar laws of Canada or other applicable jurisdictions, including at common law or equity, from time to time in effect and affecting the rights of creditors generally.
"Insolvent" means, in respect of any Person:
| (a) | such Person: |
| (i) | applies for or consents to the appointment of, or the taking of possession by a receiver, interim receiver, receiver and manager, monitor, custodian, administrator, trustee, liquidator or other similar official over such Person or all or any substantial part of such Person's assets; |
| (ii) | commits an act of bankruptcy; |
| (iii) | makes a general assignment for the benefit of creditors, or otherwise commences or consents to the commencement of proceedings under the Bankruptcy and Insolvency Act (Canada) (including proceedings in connection with any proposal or notice of intention to make a proposal thereunder), the Companies' Creditors Arrangement Act (Canada) or under any other Insolvency Law, or consents to any orders sought in any such proceedings, in each case in respect of such Person or such Person's property; |
| (iv) | takes any corporate or partnership action to authorize, or expressly states any intention to take, any of the actions described in (i) through (iii) above; or |
| (v) | (A) is unable to meet such Person's obligations as they generally become due, (B) ceases paying such Person's current obligations in the ordinary course of business as they generally become due, (C) ceases to have property that, at a fair valuation, is sufficient, or, if disposed of at a fairly conducted sale under legal process, would be sufficient to enable payment of all of such Person's obligations, due and accruing due, or (D) admits in writing that any of (A) through (C) have occurred in respect of such Person; |
| (b) | a receiver, interim receiver, receiver and manager, monitor, custodian, administrator, trustee, liquidator or other similar official is appointed over such Person or over all or any substantial part of such Person's assets; |
| (c) | an involuntary proceeding shall be commenced seeking: (i) to adjudicate such Person a bankrupt or insolvent; (ii) relief in respect of such Person or a substantial part of such Person's assets under the Bankruptcy and Insolvency Act (Canada) (including proceedings in connection with any proposal thereunder), the Companies' Creditors Arrangement Act (Canada) or any other Insolvency Law; or (iii) the appointment of a receiver, interim receiver, receiver and manager, monitor, trustee, custodian, liquidator or similar official for such Person or any substantial part of such Person's property; or |
| (d) | security enforcement, sale or foreclosure steps shall have been taken against such Person or a substantial part of such Person's property under the PPSA or similar laws of any other jurisdiction. |
"Insurance" means, collectively, the insurance made available to Obligors by Insurers with respect to Receivables under the Master Insurance Contracts.
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"Insurance Cost Yield" means, at any time, in respect of a Collection Period, the ratio (expressed as a percentage) computed by dividing (i) the Insurance Cost during such Collection Period by (ii) the Aggregate Outstanding Balance of all Purchased Receivables as of the last day of such Collection Period.
"Insurance Costs" means, collectively, the amounts paid or required to be paid by the Borrower to any Insurer out of Insurance premiums received from Obligors in accordance with any Master Insurance Contracts entered into by the Sellers, and "Insurance Cost" means any of such amounts.
"Insurers" means Canadian Premier Life Insurance Company and any other insurer that provides Insurance pursuant to the Master Insurance Contracts, to the extent permitted under the Transaction Documents, and "Insurer" means any of them.
"Intercreditor Agreement" means the intercreditor agreement dated May 12, 2023 among the Lenders, the Administrative Agent, Waterfall Asset Management, LLC, WF Marlie 2018-1, Ltd., the Borrower, the General Partner, CURO Canada Receivables Limited Partnership, by its general partner, CURO Canada Receivables GP Inc., CURO Canada Corp. and LendDirect Corp.
"Interest Distribution Amount" means, in respect of a Collection Period, (a) the daily weighted average outstanding principal amount of the Loans for such Collection Period, multiplied by (b) the Applicable Rate, divided by (c) 360, and multiplied by (d) the number of days in such Collection Period.
"Insurer Notification Letters" means the notification letter delivered to Canadian Premier Life Insurance Company dated on or about the date hereof.
"Intercompany Debt" means any Indebtedness from time to time owing by any Seller to any Affiliate thereof.
"Interest Rate Caps" means interest rate cap transactions in which the Borrower, as buyer, receives payments at the end of each period in which the interest rate exceeds the agreed strike rate, and "Interest Rate Cap" means any such transaction.
"Investment Company Act" means the Investment Company Act of 1940, as amended or otherwise modified from time to time.
"IRS" means the United States Internal Revenue Service.
"ITA" means the Income Tax Act (Canada) and the regulations thereunder, as amended from time to time.
"Judgment Currency Conversion Date" has the meaning assigned to such term in SECTION 8.19(a).
"Judgment Currency" has the meaning assigned to such term in SECTION 8.19(a).
"Lender" means the Persons listed on the Commitment Schedule and any other Person that shall have become a Lender hereunder pursuant to SECTION 8.04 or an Assignment and Assumption, other than any such Person that ceases to be a Lender hereunder pursuant to an Assignment and Assumption.
"Level 1 Collateral Trigger" means, in respect of any Collection Period, the occurrence of any of:
| (a) | a Default Ratio of greater than [* * * * *]; |
| (b) | a Delinquency Ratio of greater than [* * * * *]; |
| (c) | a Payment Ratio of less than [* * * * *]; or |
| (d) | an Excess Spread Percentage of less than [* * * * *]. |
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"Level 1 Regulatory Trigger Event" means the commencement by any Canadian Governmental Authority of a Regulatory Action.
"Level 1 Verification Trigger Event" means the Discrepancy Ratio in respect of any verification period pursuant to the terms of the Back-up Servicing and Verification Agency Agreement is greater than [* * * * *].
"Level 2 Collateral Trigger" means, in respect of any Collection Period, the occurrence of any of:
| (a) | a Default Ratio of greater than [* * * * *]; |
| (b) | a Delinquency Ratio of greater than [* * * * *]; |
| (c) | a Payment Ratio of less than [* * * * *]; or |
| (d) | an Excess Spread Percentage of less than [* * * * *]. |
"Level 2 Regulatory Trigger Event" means (a) the failure of a Regulatory Action by any Canadian Governmental Authority to be released or terminated in a manner acceptable to the Administrative Agent, acting reasonably, within [* * * * *] of the commencement thereof, but excluding any Regulatory Action that has been inactive for at least [* * * * *] (to the satisfaction of the Administrative Agent) including, for the avoidance of doubt, as a result of a change in the scope or nature of activities undertaken by the Borrower, or (b) the issuance or entering by any Governmental Authority pursuant to an Industry Regulatory Action of any cease and desist order, permanent injunction, temporary restraining order, or other judicial or non-judicial sanction, order or ruling restricting the origination, marketing, servicing or enforcement of consumer loans substantially similar to the Receivables, which has or could reasonably be expected to have a Material Adverse Effect, as determined by the Administrative Agent in its Permitted Discretion.
"Level 2 Verification Trigger Event" means the Discrepancy Ratio in respect of any verification period pursuant to the terms of the Back-up Servicing and Verification Agency Agreement is greater than [* * * * *], provided that the number of Receivables reviewed in that verification period represents at least [* * * * *] of the Receivables proposed by the Borrower for funding by the Lenders in the week corresponding to the verification period.
"Level 3 Collateral Trigger" means the occurrence, in respect of any Collection Period, of any of:
| (a) | a Default Ratio of greater than [* * * * *]; |
| (b) | a Delinquency Ratio of greater than [* * * * *]; |
| (c) | a Payment Ratio of less than [* * * * *]; or |
| (d) | an Excess Spread Percentage of less than [* * * * *]. |
"Level 3 Regulatory Trigger Event" means (i) the issuance or entering by any Governmental Authority of any stay, order, judgment, cease and desist order, injunction, temporary restraining order, or other judicial or non-judicial sanction, order or ruling related to a Regulatory Action or (ii) the enactment of a usury cap applicable to any consumer finance product offered by the Borrower Parties or the passage of any applicable federal or provincial statute or regulation restricting the offering or sale of the Receivables which, in either case, has or could reasonably be expected to have a Material Adverse Effect as determined by the Administrative Agent in its Permitted Discretion.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothec (whether legal or conventional), hypothecation, encumbrance, charge, option or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
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"Line of Credit Loan Receivables" means, collectively, the line of credit loans described in the related Underlying Agreements as personal loan agreements for lines of credit, and "Line of Credit Loan Receivable" means any one of them.
"Loan Documents" means, collectively, this Agreement, any promissory notes issued pursuant to this Agreement, the General Security Agreement, the Transaction Account Blocked Account Agreement (from and after the date that it is delivered), any other Control Agreement, the Fee Letter, the Parent Guaranty, the Intercreditor Agreement and all other agreements, instruments, documents and certificates identified in SECTION 4.01 executed and delivered to, or in favour of, the Administrative Agent or any Lender and including intercreditor agreements, subordination agreements and all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Borrower Party, or any employee of any Borrower Party, and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby. Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.
"Loan Level Data Tape" has the meaning ascribed thereto in the Back-up Servicing and Verification Agency Agreement.
"Loans" means loans and advances made by the Lenders to the Borrower pursuant to this Agreement, together with interest accrued thereon and fees and costs incurred in connection therewith.
"Make Whole Amount" means, on any given day, the sum of (i) all interest payable upon the aggregate Commitments for the period commencing on such date and ending on the date that is eighteen (18) months following the Closing Date calculated as if the aggregate Commitments were fully drawn during the entirety of such period and (ii) the aggregate Commitments multiplied by 1.5%.
"Master Insurance Contracts" means, collectively, the Master Insurance Policies and the Master Insurance Marketing Agreement, and "Master Insurance Contract" means any of them.
"Master Insurance Marketing Agreement" means the lender marketing agreement for group creditor insurance plan between Canadian Premier Life Insurance Company, Premium Services Group Inc., LendDirect Corp. and CURO Canada Corp. (formerly, Cash Money Cheque Cashing Inc.) dated March 8, 2018, as amended, replaced or supplemented, from time to time to the extent permitted under the Transaction Documents.
"Master Insurance Policies" means, collectively, the following master insurance policies:
| (a) | policy number LOC001-CM01 between Canadian Premier Life Insurance Company and CURO Canada Corp. (formerly, Cash Money Cheque Cashing Inc.); |
| (b) | policy number LOC001-LD01 between Canadian Premier Life Insurance Company and LendDirect Corp.; |
| (c) | policy number ST001-CM01 between Canadian Premier Life Insurance Company and CURO Canada Corp. (formerly, Cash Money Cheque Cashing Inc.); and |
| (d) | policy number ST001-LD001 between Canadian Premier Life Insurance Company and LendDirect Corp., |
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in each case, as amended, replaced or supplemented, from time to time to the extent permitted under the Transaction Documents, and "Master Insurance Policy" means any of them.
"Material Adverse Effect" means a material adverse effect on (a) the business, assets, operations, prospects or condition, financial or otherwise of any of (i) the Borrower Parties taken as a whole, (ii) any of the Credit Parties, (iii) any of the Sellers, or (iv) any of the Servicers, (b) the ability of any of the Borrower Parties to perform any of its obligations under any of the Transaction Documents to which it is a party, (c) a material portion of the Collateral, the Administrative Agent's Liens (on behalf of itself and other Secured Parties) on the Collateral or the priority of such Liens, or (d) the rights of or benefits available to the Administrative Agent or the Lenders under any of the Transaction Documents.
"Maturity Date" means November 12, 2025 or any earlier date on which the Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.
"Maximum Principal Amount" means one hundred and ten million ($110,000,000), provided that such amount may be increased in an amount as agreed by and in accordance with SECTION 2.07 up to a maximum of four hundred fifty million dollars ($450,000,000).
"Maximum Rate" has the meaning assigned to such term in SECTION 8.16.
"Minimum Utilization Additional Interest" has the meaning assigned to such term in Section 2.09(b).
"Minimum Utilization Threshold" means, as of any date of determination, the product computed by multiplying (i) [* * * * *] (the "Minimum Utilization Percentage") and (ii) the aggregate Commitments at such time; provided that for the three-month period following any occurrence of a Securitization Transaction (commencing with the calendar month in which such Securitization Transaction occurs), the Minimum Utilization Percentage shall temporarily be reduced to [* * * * *]; further provided that any such temporary reduction to the Minimum Utilization Percentage shall not occur more than once in any consecutive twelve (12) month period.
"Modified Contract" means, with respect to a Receivable, the related Underlying Agreement (i) was in default and which default was cured by adjusting or amending the terms of such Underlying Agreement or accepting a reduced payment, or (ii) was amended or otherwise modified at any time to reduce the interest rate, extend the original term, reduce, or change the frequency of, the payments, or extend the scheduled payment dates or reduce the principal balance.
"Monthly Settlement Date" means the first Weekly Settlement Date of each calendar month.
"Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"Obligor" means, with respect to any Receivable, the Person or Persons obliged to make payments in respect thereof.
"OFAC" means the Office of Foreign Assets Control of the United States Department of the Treasury.
"Online Receivables" means all Receivables which were originated by the Sellers through an online platform in accordance with the applicable Requirements of Law.
"Organizational Documents" of any Person means its memorandum and articles of association, articles or certificate of incorporation or formation and by-laws, limited liability agreement, partnership agreement, declaration of trust or other comparable charter or organizational documents as amended from time to time and shall include with respect to the Borrower, the Partnership Agreement.
"Original Issue Discount Amount" has the meaning ascribed in SECTION 2.09(c).
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"Original Issue Discount Rate" has the meaning given to such term in the Fee Letter.
"Other Connection Taxes" means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan or any Loan Document).
"Other Taxes" means all present or future stamp, court or documentary, intangible, value added, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to SECTION 2.15).
"Outstanding Balance" means, with respect to any Receivable at any time, the outstanding balance, which remains unpaid and owing from the relevant Obligor at such time, excluding any amount payable on account of fees, commissions, finance charges, late payment charges and other similar items.
"Parent Guarantor" means CURO Group Holdings Corp.
"Parent Guaranty" means the limited guaranty provided by the Parent Guarantor dated on or about the date hereof.
"Participant Register" has the meaning assigned to such term in SECTION 8.04(d).
"Participant" has the meaning assigned to such term in SECTION 8.04(c).
"Partnership Agreement" means the limited partnership agreement in respect of the Borrower dated as of April 17, 2023 between, inter alia, the General Partner as general partner.
"Payment Ratio" means, at any time, the weighted average (expressed as a percentage) of the ratios computed for each of the two immediately preceding Collection Periods by dividing, in respect of each such Collection Period, (a) the total Collections received in the Transaction Account of the last day of the applicable Collection Period by (b) the Aggregate Outstanding Balance of all Purchased Receivables as at the end of such day.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
"Pending Eligible Receivables" means Receivables that would be Eligible Receivables but for the fact that the first scheduled payment of the relevant Obligor pursuant to the related Underlying Agreement is pending.
"Permitted Discretion" means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.
"Permitted Encumbrances" means, with respect to any Person or its assets, (a) any inchoate Liens for current taxes, assessments, levies, fees and other government and similar charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been established in accordance with GAAP, but only so long as foreclosure, execution or garnishment with respect to such Lien is not imminent and the use and value of the property to which the liens attach are not impaired during the pendency of such proceedings, (b) with respect to CURO Canada Corp. and LendDirect Corp, any Lien in favour of the secured parties under or pursuant to that certain second amended and restated asset-backed revolving credit agreement dated as of November 12, 2021 made between, amongst others, CURO Canada Receivables Limited Partnership, as Borrower, and Waterfall Asset Management, LLC, as administrative agent, as amended, modified, supplemented, restated or replaced from time to time, and the Transaction Documents defined therein, provided that such Lien or Liens have been released by such secured parties in respect of any Purchased Assets sold pursuant to the Sale and Servicing Agreement effective as of the date and time that such Purchased Assets are sold to the Borrower and, for the avoidance of doubt, shall not be considered to be a Permitted Encumbrance in respect of any Purchased Assets upon their Purchase, (c) any Lien in favour of, or assigned to, the Administrative Agent (for the benefit of the Secured Parties) under the Transaction Documents, and (d) any other Lien which the Administrative Agent has consented to in writing, and, for the avoidance of doubt, Liens arising under ERISA are not Permitted Encumbrances.
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"Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
"PIPEDA" means the Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5.
"Plan" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Portfolio Limits" means, in respect of the Purchased Receivables, the following limits: [* * * * *].
"Portfolio Yield" means, at any time in respect of a Collection Period, a percentage equal to (i) the total non-principal Collections (including insurance premiums) received from Obligors into the Transaction Account as of the last day of such Collection Period, divided by (ii) the Aggregate Outstanding Balance of all Purchased Receivables as of the last day of such Collection Period, multiplied by (iii) 12.
"PPSA" means the Personal Property Security Act (Ontario), including the regulations thereto and related Minister's Orders, provided that if perfection or the effect of perfection or non-perfection or the priority of any Lien created hereunder or under any other Loan Document on the Collateral is governed by the personal property security legislation or other applicable legislation with respect to personal property security in effect in any applicable jurisdiction in Canada, "PPSA" means the Personal Property Security Act or such other applicable legislation (including, the Civil Code of Quebec) in effect from time to time in such other jurisdiction in Canada for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
"Principal Balance" means, with respect to a Receivable, the outstanding principal balance owing on such Receivable.
"Privacy Laws" means PIPEDA and any regulations thereunder, as amended, replaced or supplemented from time to time, and any other similar applicable federal, provincial or territorial legislation now in force or that may in the future come into force in Canada governing the protection of personal information in the private sector.
"Proceeds of Crime Act" means the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), as amended from time to time, and including all regulations thereunder.
"Projections" has the meaning assigned to such term in SECTION 5.19(d).
"Purchase" means each purchase by the Borrower of Purchased Receivables pursuant to the terms of the Sale and Servicing Agreement and a Purchase Notice.
"Purchase Date" means, in respect of each Purchase, the date specified as such in the Purchase Notice applicable to such Purchase.
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"Purchase Notice" means an offer by the Sellers to sell assets to the Borrower in the form attached as Schedule A to the Sale and Servicing Agreement.
"Purchased Assets" means the Receivables purchased by the Borrower under the Sale and Servicing Agreement (other than those repurchased by the Sellers), the Related Rights thereto and the related Collections.
"Purchased Receivables" means Eligible Receivables and Pending Eligible Receivables that are purchased pursuant to the Sale and Servicing Agreement.
"Qualified Lender" means a financial institution or investment fund that is listed on Schedule I, II, or III of the Bank Act (Canada), has received an approval to have a financial establishment in Canada pursuant to Section 522.21 of the Bank Act (Canada) or is not a foreign bank for purposes of the Bank Act (Canada), and if such financial institution or investment fund is not deemed to be resident of Canada for purposes of the ITA, that financial institution or investment fund deals at arm's length with the Borrower for purposes of the ITA.
"Receivables" means the indebtedness and other obligations originally owed to CURO Canada Corp. and LendDirect Corp. (Canada) in connection with any and all liens, installment sale agreements, instruments, consumer finance paper and/or promissory notes securing and evidencing unsecured multi-pay consumer line of credit and installment loans made and/or acquired by CURO Canada Corp. or LendDirect Corp. (Canada), as the case may be, which were originated in accordance with the Credit and Collection Policies or which are otherwise included as Collateral.
"Receivables Sale Termination Notice" has the meaning given to such term in SECTION 5.36(a)(xi).
"Recipient" means, as applicable, (a) the Administrative Agent and (b) any Lender, or any combination thereof (as the context requires).
"Records" means, at any time in relation to a Seller and with respect to any Receivable, all contracts and other documents, records and other information (including, without limitation, computer programs, tapes, disks, data processing software and related property and rights) relating to such Receivables, any Related Rights and the related Obligor, in each case, related to such Seller, which are reasonably necessary, in light of the circumstances then subsisting, to service or enforce such Receivable and Related Rights.
"Re-Direction Event" means the occurrence of any of the following events:
| (a) | a Level 2 Collateral Trigger; and |
| (b) | a Level 2 Regulatory Trigger Event. |
"Register" has the meaning assigned to such term in SECTION 8.04(b).
"Regulatory Action" means, other than a Routine Inquiry, any inquiry, investigation, legal action or proceeding by any Governmental Authority alleging any noncompliance by any Borrower Party or, to the knowledge of the Borrower or any other CURO Entity, any third party engaged by a Borrower Party with such jurisdiction's applicable consumer credit laws or insurance laws, which, if adversely determined, could reasonably be expected to have a Material Adverse Effect as determined by the Administrative Agent in its Permitted Discretion.
"Regulatory Trigger Event" means a Level 1 Regulatory Trigger Event, a Level 2 Regulatory Trigger Event or a Level 3 Regulatory Trigger Event.
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"Related Parties" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and such Person's Affiliates.
"Related Rights" means, in respect of any Receivable:
| (a) | all Liens and property securing or attaching to such Receivable from time to time, if any, purporting to secure payment of such Receivable or otherwise, together with any and all security documents describing any assets securing such Receivable; |
| (b) | all deposits, insurance, guarantees, letters of credit, indemnities, warranties and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Underlying Agreement for such Receivable or otherwise; |
| (c) | all rights to receive and obtain payment under the Underlying Agreement for such Receivable including rights of enforcement under the Underlying Agreement against the relevant Obligor; |
| (d) | all Records related to such Receivable; |
| (e) | all rights to enforce payment under the Underlying Agreement against the relevant Obligor and all rights to demand, sue for, recover, receive and give receipt for all such amounts; |
| (f) | all Collections and any other proceeds (including the proceeds of any sale or disposal) related to such Receivable; and |
| (g) | all proceeds of any of the foregoing. |
"Repayment Notice" means a notice in the form set forth in
EXHIBIT C hereto.
"Report" means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the assets of the Borrower from information furnished by or on behalf of the Borrower, after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.
"Reporting Date" means the tenth (10th) calendar day of each month (or, if such day is not a Business Day, the first Business Day to occur thereafter).
"Required Lenders" means, at any time, one or more Lenders (other than Defaulting Lender) having Exposures and unused Commitments representing more than 50% of the sum of the Aggregate Exposure and unused Commitments at such time.
"Requirement of Law" means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person and (b) any statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
"Restricted Payment" means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Borrower or any option, warrant or other right to acquire any such Equity Interests in the Borrower.
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"Revolving Period" means the period from the Closing Date until the Revolving Period End Date.
"Revolving Period End Date" means the earliest of (i) the Maturity Date, (ii) the occurrence of an Amortization Event or (iii) the occurrence of an Event of Default.
"Right to Increase" has the meaning assigned to such term in SECTION 2.07(c).
"Right to Increase Effective Date" has the meaning assigned to such term in SECTION 2.07(c).
"Right to Increase Trigger Event" has the meaning assigned to such term in the Fee Letter.
"Routine Inquiry" includes, without limitation, any inquiry, written or otherwise, made by a Governmental Authority via a form letter or otherwise which does not contain any specific allegations or violations, other than in connection with the routine transmittal of a consumer complaint.
"Sale and Servicing Agreement" means the sale and servicing agreement between the Borrower and the Sellers for the purchase of Eligible Receivables from time to time in accordance with the terms and conditions therein, dated on or about the date hereof.
"Sanctioned Country" means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba (but not with respect to Canada or to the Borrower), Iran, North Korea, Sudan, Syria, Kherson, Zaporizhzhia regions of Ukraine, the so-called Donetsk People's Republic, and the so-called Luhansk People's Republic).
"Sanctioned Person" means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the Government of Canada, the Government of any province or territory of Canada or by the United Nations Security Council, the European Union or any EU member state, Her Majesty's Treasury of 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 (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, or (b) the United Nations Security Council, the Government of Canada, the European Union, any EU member state, Her Majesty's Treasury of the United Kingdom or other relevant sanctions authority.
"SEC" means the Securities and Exchange Commission of the U.S.
"Secured Obligations" means all unpaid principal of and accrued and unpaid interest on the Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of the Borrower to any of the Lenders, the Administrative Agent or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents, in each case in respect of any of the Loans made or reimbursement or other obligations incurred or other instruments at any time evidencing any thereof.
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"Secured Parties" means (a) the Administrative Agent, (b) the Lenders, (c) the Back-up Servicer, (d) the Verification Agent, (e) the beneficiaries of each indemnification obligation undertaken by the Borrower under any Transaction Document, and (f) the successors and assigns of each of the foregoing.
"Securitization Transaction" means any term, revolving or other direct placement, private placement, Rule 144A, public or other capital markets transaction pursuant to which the Borrower sells or transfers all or any portion of the Purchased Assets to a special purpose entity which issues asset-backed securities that are broadly marketed and offered to unaffiliated third-party investors through an underwriter, initial purchaser or placement agent pursuant to an offering memorandum, offering circular or term sheet and that are collateralized, in whole or in part, directly or indirectly, by the transferred Purchased Assets.
"Security" means the Liens created by the General Security Agreement.
"Security Interest" has the meaning assigned to such term in the General Security Agreement.
"Seller Collections Account Bank" means the Royal Bank of Canada, [* * * * *].
"Seller Collections Accounts" means the accounts of the Sellers into which Collections are received from Obligors or transferred from other Seller accounts, listed in Schedule 3.
"Sellers" means each of CURO Canada Corp. and LendDirect Corp. (Canada), and "Seller" means any of them.
"Sellers Secured Obligation" means all obligations and liabilities of the Sellers to the Borrower or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under the Sale and Servicing Agreement or any of the other Transaction Documents or other instruments at any time evidencing any thereof.
"Sellers Security Agreement" means that certain sellers security agreement (including any and all supplements thereto), dated as of the Effective Date, among the Sellers and the Borrower, for the benefit of the Borrower, and any other pledge or security agreement governed by the laws of a province or territory of Canada entered into, after the date of this Agreement by the Sellers (as required by this Agreement or any other Transaction Document) or any other Person for the benefit of the Borrower, as the same may be amended, restated, supplemented or otherwise modified from time to time.
"Servicers" means, collectively, (i) as at the Closing Date, the Initial Servicers or (ii) each successor or replacement Servicer as may be appointed pursuant to the Transaction Documents, and "Servicer" means any one of them.
"Servicer Termination Event" has the meaning assigned to such term in the Sale and Servicing Agreement.
"Servicing Cost" means, as of any date of determination, an annualized percentage, calculated with reference to the Aggregate Eligible Pool Balance and the related Collection Period, equal to the monthly ratio of (a) the sum of all Servicing Fees and all collection fees during each such Collection Period divided by (b) the Aggregate Outstanding Balance of the Purchased Receivables as of the last day of the immediately preceding Collection Period, provided that the Servicing Cost shall not be less than 3.5%.
"Servicing Fee" means (i) with respect to the Initial Servicers, zero, (ii) with respect to the Back-up Servicer, and with respect to any other replacement or successor Servicer appointed in accordance with the Transaction Documents, an amount agreed with the Back-up Servicer, replacement or successor Servicer, as applicable, in any relevant servicing agreement, subject to the consent of the Lenders.
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"Servicing Report" means the servicing report prepared by the Servicers in the form attached as Schedule C to the Sale and Servicing Agreement.
"Specified Fields" has the meaning ascribed thereto in the Back-up Servicing and Verification Agency Agreement.
"Subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
"Supermajority Lender" means, at any time, Lenders (other than Defaulting Lender) having Exposures and unused Commitments representing at least 66 2/3% of the sum of the Aggregate Exposure and unused Commitments at such time.
"Swap Agreement" means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower shall be a Swap Agreement.
"Taxes" means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), value added taxes, or any other goods and services, use or sales taxes, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax, fines or penalties applicable thereto.
"Term Loan Agreement" has the meaning given to such term in SECTION 4.01(b)(ix).
"Transaction Account" means the account of the Borrower with account number [* * * * *], transit number [* * * * *], held with the Transaction Account Bank.
"Transaction Account Bank" means the Royal Bank of Canada, [* * * * *].
"Transaction Account Blocked Account Agreement" means the blocked account agreement to be entered into between the Transaction Account Bank, the Borrower and the Administrative Agent in respect of the Transaction Account.
"Transactions" means the execution, delivery and performance by the Borrower of this Agreement and the other Transaction Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof.
"Transaction Documents" means each Loan Document, each Interest Rate Cap, the Back-up Servicing and Verification Agency Agreement (from and after the date that it is delivered), the Sellers Security Agreement and the Sale and Servicing Agreement.
"Uncured Level 1 Verification Trigger Event" means the occurrence of a Level 1 Verification Trigger Event and such event has not been cured, within thirty (30) days, by the Borrower providing a new Loan Level Data Tape and the Verification Agent completing the verifications pursuant to the Back-up Servicing and Verification Agency Agreement of five hundred (500) Receivables from the Loan Level Data Tape and the Discrepancy Ratio in respect of that new verification test is less than [* * * * *].
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"Uncured Level 2 Verification Trigger Event" means the occurrence of a Level 2 Verification Trigger Event and such event has not been cured, within thirty (30) days, by the Borrower providing a new Loan Level Data Tape and the Verification Agent completing the verifications pursuant to the Back-up Servicing and Verification Agency Agreement of five hundred (500) Receivables from the Loan Level Data Tape and no discrepancies being found in such verification test.
"Underlying Agreements" means, collectively, any agreements with an Obligor (including any modifying agreements supplemental thereto) from which any Receivable derives and any related documents, and "Underlying Agreement" means any one of them.
"Unliquidated Obligations" means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.
"Unused Additional Interest" means the fee pursuant to SECTION 2.09(a).
"Unused Additional Interest Rate" has the meaning given to such term in the Fee Letter.
"U.S. Person" means a "United States person" within the meaning of Section 7701(a)(30) of the Code.
"U.S. Tax Compliance Certificate" has the meaning assigned to such term in SECTION 2.13(f)(ii)(B)(3).
"USA PATRIOT Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
"Verification Agent" means SST Office Services Inc. and any successor thereto pursuant to the Back-up Servicing and Verification Agency Agreement.
"Verification Agency Fee" means the fees owing to the Verification Agent pursuant to the Back-up Servicing and Verification Agency Agreement.
"Verification Certificate" means the certificate so named, the form of which is set out in Exhibit D to the Back-up Servicing and Verification Agency Agreement.
"Volcker Rule" means Section 13 of the U.S. Bank Holding Company Act of 1956, as amended, and the applicable rules and regulations thereunder.
"Weekly Settlement Date" means every Thursday of each calendar week, provided that if such day is not a Business Day, the Weekly Settlement Date shall be the following Business Day, and each date that is deemed to be a Weekly Settlement Date pursuant to SECTION 2.08(b)(i).
"Weighted Average Portfolio Interest Rate" means, at any time in respect of a Collection Period, a percentage equal to the quotient of (i) the sum of the product of the (A) the principal balance as at end of such Collection Period of each Eligible Receivable included in the Aggregate Eligible Pool Balance as at the end of such Collection Period and (B) the annual interest rate on such Eligible Receivable included in the Aggregate Eligible Pool Balance, divided by (ii) the sum of the principal balances as at the end of such Collection Period of all Eligible Receivables included in the Aggregate Eligible Pool Balance.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
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"Write-Down and Conversion Powers" means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
| SECTION 1.02 | Terms Generally. |
The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "law" shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply) and all judgments, orders and decrees of all Governmental Authorities. The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person's successors and assigns (subject to any restrictions on assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in any definition to the phrase "at any time" or "for any period" shall refer to the same time or period for all calculations or determinations within such definition, (g) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (h) unless otherwise provided herein, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and each of the words "to" and "until" means "to but excluding".
| SECTION 1.03 | Accounting Terms; GAAP. |
Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if after the date hereof there occurs any change in GAAP or in the application thereof on the operation of any provision hereof and the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of such change in GAAP or in the application thereof (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. 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 any election under Accounting Standards Codification Section 825-10 (or any other financial accounting standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower at "fair value", as defined therein.
| SECTION 1.04 | CDOR Fallback. |
| (i) | Replacing CDOR. On May 16, 2022, Refinitiv Benchmark Services (UK) Limited ("RBSL"), the administrator of CDOR, announced in a public statement that the calculation and publication of all tenors of CDOR will permanently cease immediately following a final publication on Friday, June 28, 2024. Notwithstanding anything to the contrary herein or in any other Loan Document, on the date that all Available Tenors of CDOR have either permanently or indefinitely ceased to be provided by RBSL, if the then-current Benchmark is CDOR, the Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any setting of such Benchmark on such day and all subsequent settings without any amendment to, or further action or consent of any other party to this Agreement or any other Loan Document. If the Benchmark Replacement is Daily Compounded CORRA, all interest payments will be payable on a monthly basis. |
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| (ii) | Replacing Future Benchmarks. Upon the occurrence of a Benchmark Transition Event, the Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (Toronto time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders. At any time that the administrator of the then-current Benchmark has permanently or indefinitely ceased to provide such Benchmark or such Benchmark has been announced by the administrator or the regulatory supervisor for the administrator of such Benchmark pursuant to public statement or publication of information to be no longer representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored, the Borrower may revoke any request for a borrowing of, conversion to or continuation of Loans to be made, converted or continued that would bear interest by reference to such Benchmark until the Borrower's receipt of notice from the Administrative Agent that a Benchmark Replacement has replaced such Benchmark. |
| (iii) | Benchmark Replacement Conforming Changes. In connection with the implementation and administration of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document. |
| (iv) | Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (i) the implementation of any Benchmark Replacement, (ii) any occurrence of a Term CORRA Transition Event, and (iii) the effectiveness of any Benchmark Replacement Conforming Changes. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 1.04, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 1.04. |
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| (v) | Unavailability of Tenor of Benchmark. At any time (including in connection with the implementation of a Benchmark Replacement), if the then-current Benchmark is a term rate (including Term CORRA or CDOR), then (i) the Administrative Agent may remove any tenor of such Benchmark that is unavailable or non-representative for Benchmark (including Benchmark Replacement) settings and (ii) the Administrative Agent may reinstate any such previously removed tenor for Benchmark (including Benchmark Replacement) settings. |
| (vi) | Secondary Term CORRA Conversion. Notwithstanding anything to the contrary herein or in any Loan Document and subject to the proviso below in this clause, if a Term CORRA Transition Event and its related Term CORRA Transition Date have occurred, then on and after such Term CORRA Transition Date (i) the Benchmark Replacement described in clause (a)(i) of such definition will replace the then-current Benchmark for all purposes hereunder or under any Loan Document in respect of any setting of such Benchmark on such day and all subsequent settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document; and (ii) each Loan outstanding on the Term CORRA Transition Date bearing interest based on the then-current Benchmark shall convert, at the start of the next interest payment period, into a Loan bearing interest at the Benchmark Replacement described in clause (a)(i) of such definition having a tenor approximately the same length as the interest payment period applicable to such Loan immediately prior to the conversion or such other Available Tenor as may be selected by the Borrower and agreed by the Administrative Agent; provided that, this clause (vi) shall not be effective unless the Administrative Agent has delivered to the Lenders and the Borrower a Term CORRA Notice, and so long as the Administrative Agent has not received, by 5:00 p.m. (Toronto time) on the fifth (5th) Business Day after the date of the Term CORRA Notice, written notice of objection to such conversion to Term CORRA from Lenders comprising the Required Lenders or the Borrower. |
| (vii) | Definitions. As used in this Section 1.04 or otherwise with respect to CDOR: |
"Available Tenor" means, as of any date of determination and with respect to the then current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period or Contract Period, as applicable, or (y) otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Agreement as of such date.
"Benchmark" means, initially, CDOR; provided that if a replacement of the Benchmark has occurred pursuant to Section 1.04(i), then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate. Any reference to "Benchmark" shall include, as applicable, the published component used in the calculation thereof.
"Benchmark Replacement" means, for any Available Tenor:
| (A) | For purposes of Section 1.04(i), the first alternative set forth below that can be determined by the Administrative Agent: |
| (B) | the sum of: (x) Term CORRA and (y) 0.29547% (29.547 basis points) for an Available Tenor of one-month's duration, and 0.32138% (32.138 basis points) for an Available Tenor of three months' duration, or |
| (C) | the sum of: (i) Daily Compounded CORRA and (ii) 0.29547% (29.547 basis points) for an Available Tenor of one-month's duration, and 0.32138% (32.138 basis points) for an Available Tenor of three-months' duration; and |
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For purposes of Section 1.04(ii), the sum of (x) the alternate benchmark rate and (y) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by the Administrative Agent and the Borrower as the replacement for such Available Tenor of such Benchmark giving due consideration to any evolving or then-prevailing market convention, including any applicable recommendations made by the Relevant Governmental Body, for Canadian dollar-denominated syndicated credit facilities at such time;
provided that, if the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
"Benchmark Replacement Conforming Changes" means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of "Business Day," the definition of "Interest Period", the timing and frequency of determining rates and making payments of interest, the timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters), that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
"Benchmark Transition Event" means, with respect to any then-current Benchmark other than CDOR, the occurrence of a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark, the regulatory supervisor for the administrator of such Benchmark, the Bank of Canada, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, announcing or stating that (a) such administrator has ceased or will cease on a specified date to provide all Available Tenors of such Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark or (b) all Available Tenors of such Benchmark are or will no longer be representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored.
"CORRA" means the Canadian Overnight Repo Rate Average administered and published by the Bank of Canada (or any successor administrator).
"Daily Compounded CORRA" means, for any day, CORRA with interest accruing on a compounded daily basis, with the methodology and conventions for this rate (which will include compounding in arrears with a lookback) being established by the Administrative Agent in accordance with the methodology and conventions for this rate selected or recommended by the Relevant Governmental Body for determining compounded CORRA for business loans; provided that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion; and provided that if the administrator has not provided or published CORRA and a Benchmark Transition Event with respect to CORRA has not occurred, then, in respect of any day for which CORRA is required, references to CORRA will be deemed to be references to the last provided or published CORRA.
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"Relevant Governmental Body" means the Bank of Canada, or a committee officially endorsed or convened by the Bank of Canada, or any successor thereto.
"Term CORRA" means, for the applicable corresponding tenor, the forward-looking term rate based on CORRA that has been selected or recommended by the Relevant Governmental Body, and that is published by an authorized benchmark administrator and is displayed on a screen or other information service, as identified or selected by the Administrative Agent in its reasonable discretion at approximately a time and as of a date prior to the commencement of an Interest Period determined by the Administrative Agent in its reasonable discretion in a manner substantially consistent with market practice.
"Term CORRA Notice" means the notification by the Administrative Agent to the Lenders and the Borrower of the occurrence of a Term CORRA Transition Event.
"Term CORRA Transition Date" means, in the case of a Term CORRA Transition Event, the date that is set forth in the Term CORRA Notice provided to the Lenders and the Borrower, for the replacement of the then-current Benchmark with the Benchmark Replacement described in clause (a) of such definition, which date shall be at least thirty (30) Business Days from the date of the Term CORRA Notice.
"Term CORRA Transition Event" means the determination by the Administrative Agent that (a) Term CORRA has been recommended for use by the Relevant Governmental Body, and is determinable for any Available Tenor, (b) the administration of Term CORRA is administratively feasible for the Administrative Agent and (c) a Benchmark Replacement, other than Term CORRA, has replaced CDOR in accordance with Section 1.04(i).
| SECTION 1.05 | Limited Partnership. |
Where any reference is made in this Agreement, any other Transaction Document or any other agreement, document or instrument executed pursuant hereto or contemplated hereby to which the Borrower is a party to an act or covenant to be performed by the Borrower, such reference shall be construed and applied for all purposes as if it referred to an act or covenant to be performed by the General Partner acting in its capacity as general partner of the Borrower and for and on behalf of the Borrower.
Article 2
THE CREDITS
| SECTION 2.01 | THE LOANS. |
| (a) | During the Availability Period, the Borrower may request to Administrative Agent on behalf of the Lenders to make Advances to the Borrower and, subject to the terms and conditions of this Agreement, each Lender severally and not jointly agrees to lend such Lender's Applicable Percentage of each requested Advance up to such Lender's Commitment which the Borrower may repay and reborrow from time to time until the occurrence of one of the foregoing events. Requests for Advances shall be made no more than one (1) time per calendar week in accordance with SECTION 2.06. The aggregate unpaid principal amount at any one time outstanding of all Advances shall not exceed the Maximum Principal Amount, and the aggregate unpaid principal amount at any one time outstanding of all Advances shall not exceed the aggregate Commitments then in effect or the Borrowing Base in effect as of the date of determination. |
| (b) | Absent manifest error, the Administrative Agent's determinations hereunder with respect to records of the amount of the Borrower's indebtedness to the Administrative Agent, any holders of Notes and the Lenders from time to time by reason of Advances and other appropriate charges (including, without limitation, interest rate, fees and charges) hereunder shall be considered correct and accepted by the Borrower and conclusively binding upon the Borrower unless the Borrower notifies the Administrative Agent to the contrary within thirty (30) days of Administrative Agent's providing a statement to the Borrower. |
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| (c) | The Loans shall be due and payable on the Maturity Date. Upon the occurrence of an Event of Default, the Administrative Agent shall have rights and remedies available to it under Article 6 of this Agreement. |
| (d) | The Verification Agent shall complete the verifications pursuant to the Back-up Servicing and Verification Agency Agreement (from and after the delivery thereof). |
| SECTION 2.02 | NOTES. |
| (a) | The indebtedness of the Borrower to each Lender or holder of any Note hereunder, if requested by such Lender or holder of any Note, shall be evidenced by separate Notes executed by the Borrower in favour of such Lender or holder of any Note in the principal amounts equal to each such Lender's Commitment. The aggregate principal amount of the Notes will be the total of the aggregate Commitments; provided, however, that notwithstanding the face amount of the Notes, the Borrower's liability under the Notes shall be limited at all times to the actual indebtedness (principal, interest and fees) then outstanding and owing by the Borrower to the Administrative Agent, any holders of Notes and the Lenders hereunder. |
| SECTION 2.03 | APPLICATION OF PROCEEDS. |
In each Servicing Report, the Borrower or CURO Canada Corp., as Servicer, on its behalf, shall include the proposed amounts and application of payments in accordance with this SECTION 2.03, for the approval of the Administrative Agent. Notwithstanding any other provisions of this Agreement or any other Transaction Document to the contrary, all Collections and any amounts paid by the counterparty under any Interest Rate Cap (for the avoidance of doubt, including any payments upon a termination of any Interest Rate Cap) or proceeds of sale of any Interest Rate Cap on deposit in the Transaction Account and any interest earned thereon as of the last Business Day of the relevant Collection Period (and, following the occurrence of an Event of Default, any proceeds of enforcement of the security interests held by the Administrative Agent pursuant to the Transaction Documents) and any unapplied Financing Transaction Prepayment Amounts (collectively, the "Available Amount") will be applied, with the prior written approval (including by email) of the Administrative Agent, on the corresponding Weekly Settlement Date or the Monthly Settlement Date, as the case may be, in accordance with this SECTION 2.03 (provided that, following the occurrence of an Event of Default, payments may be made on any day) in the following order of priority:
| (a) | FIRST, to the payment, on each Monthly Settlement Date, on a pari passu basis: |
| (i) | to: |
| (A) | any Servicer other than the Back-up Servicer (including in its capacity as successor Servicer), of any accrued and unpaid Servicing Fees, costs and expenses and indemnities due and payable in accordance with the relevant servicing agreement; |
| (B) | any Insurer, of any Insurance Costs due and payable to such Insurer; |
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| (C) | the Transaction Account Bank, of any accrued and unpaid fees, costs and expenses and indemnities due and payable in accordance with the Transaction Documents, |
together with, in the case of any of the foregoing fees, any payments or self-assessments of sales Taxes required thereon (which, for greater certainty, are not required in the case of the Initial Servicers), and provided that with respect to any amounts payable to any Servicer other than the Back-up Servicer (including in its capacity as successor Servicer), any Insurer and the Transaction Account Bank under this SECTION 2.03(a)(i) (other than Insurance Costs, except as set forth below), the amounts paid (other than amounts payable to a tax authority in respect of sales Taxes) will at all times be subject to the Expenses Cap (which, for the avoidance of doubt, shall be calculated by reference to a period of twelve (12) consecutive Collection Periods); and
| (ii) | to the Back-up Servicer (including in its capacity as successor Servicer), of any Back-up Servicing Fees, Servicing Fees, costs and expenses and indemnities due and payable, and to the Verification Agent, of any Verification Agency Fees, costs and expenses and indemnities due and payable, each in accordance with the Back-up Servicing and Verification Agency Agreement (or any successor servicing agreement) together with, in the case of any of the foregoing fees, any payments or self-assessments of sales Taxes required thereon, it being understood and agreed that the Expenses Cap shall not apply to the Back-up Servicer (including if it is then acting as successor Servicer or Verification Agent), but: |
| (A) | prior to the occurrence of an Event of Default, the amounts paid (other than amounts payable to a tax authority in respect of sales Taxes) will be subject to the following caps: |
| (1) | indemnities due and payable to the Back-up Servicer and/or the Verification Agent shall be subject to a cap of $50,000 per annum; |
| (2) | indemnities due and payable to any successor Servicer shall be subject to a cap of $100,000 per annum; and |
| (3) | transition expenses with respect to the Back-up Servicer shall be subject to a cap of $50,000 per annum (which, for the avoidance of doubt, shall be calculated by reference to a period of twelve (12) consecutive Collection Periods); and |
| (B) | following an Event of Default, the caps set forth in clause (A) above shall not apply at any time with respect to any fees, costs, expenses and indemnities due and payable to the Verification Agent and the Back-up Servicer, including if it is then acting as successor Servicer; |
| (b) | SECOND, to the payment, on each Monthly Settlement Date (or each Weekly Settlement Date upon the occurrence of an Event of Default or Amortization Event), on a pari passu basis, of all accrued and unpaid fees, interest, charges, costs and expenses and indemnities payable to the Lenders and the Administrative Agent and any holders of Notes hereunder, including (for the avoidance of doubt) any Administrative Agent Fee, Minimum Utilization Additional Interest, Unused Additional Interest and Exit Additional Interest (if applicable), together with any payments or self-assessments of sales Taxes required thereon; |
| (c) | THIRD, to the payment, on each Weekly Settlement Date, on a pari passu basis, to the Lenders of (i) following an Amortization Event or an Event of Default, the amount required to reduce the Aggregate Exposure to zero, or (ii) during the Revolving Period (for the avoidance of doubt, if no Amortization Event or Event of Default has occurred), (A) the amount required to cure any Borrowing Base Deficiency; and (B) any prepayment of the outstanding Aggregate Exposure in accordance with SECTION 2.08(b); |
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| (d) | FOURTH, to the payment, on each Monthly Settlement Date and on a pari passu basis, of all other fees, expenses, indemnities or other amounts owed by the Borrower under the Transaction Documents which have not been paid, together with any payments or self-assessments of sales Taxes required thereon (including amounts which would have been payable pursuant to clause "FIRST" but which was not paid due to the Expenses Cap or other cap); and |
| (e) | FIFTH, to the payment, on each Weekly Settlement Date, of the surplus, if any, to the Sellers as deferred purchase price pursuant to the terms of the Sale and Servicing Agreement. |
| (f) | In carrying out the foregoing, (a) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category, (b) each of the Lenders and any holders of Notes shall receive an amount equal to its pro rata share (based on the proportion of its then outstanding Loans outstanding of amounts available to be applied above) and (c) on each Weekly Settlement Date that is not a Monthly Settlement Date, the Available Amount for such Weekly Settlement Date shall only be applied to pay (i) amounts due under SECTION 2.03(c) after reserving for amounts becoming due under SECTION 2.03(a) and SECTION 2.03(b) on the next Monthly Settlement Date and (ii) amounts due under SECTION 2.03(e) after reserving for amounts becoming due under SECTION 2.03(a) through SECTION 2.03(d) on the next Monthly Settlement Date, and, for greater certainty, the Available Amount not so applied shall be retained in the Transaction Account for application on the next Weekly Settlement Date in accordance with this SECTION 2.03. |
| (g) | For the avoidance of doubt, the Borrower shall pay any deferred purchase price to the Sellers in accordance with Section 2.01(b) of the Sale and Servicing Agreement and shall reimburse the Servicer for any servicer advances in accordance with Section 5.06 of the Sale and Servicing Agreement in accordance with this SECTION 2.03 and only to the extent that surplus funds are available following the payment of items (a) to (d) (inclusive) above, and shall only instruct the Sellers and Servicers to make payments pursuant to the Sale and Servicing Agreement in accordance with the terms hereof or otherwise with the consent of the Administrative Agent. |
| SECTION 2.04 | USE OF PROCEEDS. |
| (a) | Advances shall be used solely to finance the acquisition of Eligible Receivables pursuant to and in accordance with the terms and conditions of the Sale and Servicing Agreement on and after the Closing Date. |
| (b) | Without in any way affecting the obligations of the Borrower, none of the Finance Parties are bound to monitor or verify the application of amounts raised by the Borrower under this Agreement. |
| SECTION 2.05 | INTEREST |
| (a) | Prior to the Maturity Date, the outstanding balance of the Loans will bear interest at an annual rate (i) prior to the occurrence of an Event of Default, equal to the Applicable Rate and (ii) upon the occurrence of an Event of Default, equal to the Default Rate. |
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| (b) | Upon receipt of such information from the Servicers pursuant to the Sale and Servicing Agreement, the Borrower will notify the Administrative Agent of its determination of the Applicable Rate in effect for any Collection Period, which will only take effect with the approval of the Administrative Agent of such rate. On the Business Day prior to each Reporting Date, the Administrative Agent shall give notice to the Servicers for inclusion in the Servicing Report of (i) that portion of the Interest Distribution Amount attributable to the Loans held by each Lender for the current Collection Period and any adjustment required to account for any difference between the Interest Distribution Amount for the prior Collection Period and such amounts as shown on the Servicing Report for the prior Collection Period, and (ii) the outstanding principal amount of the Loans held by each Lender. |
| (c) | Interest shall be payable in accordance with SECTION 2.03 until the Commitments are terminated and the Secured Obligations are paid in full. Interest as provided hereunder will be calculated on the basis of a three hundred sixty (360) day year and the actual number of days elapsed. |
| (d) | From and after the Maturity Date, or such earlier date as the Aggregate Exposure and other Secured Obligations become due and payable by acceleration or otherwise, or at the Administrative Agent's option upon the occurrence of an Event of Default, the Borrower hereby agrees to pay interest on the Aggregate Exposure and other Secured Obligations and, to the extent permitted by law, overdue interest with respect thereto, at the rate of the lesser of (i) the Applicable Rate and (ii) the highest lawful rate. |
| (e) | For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or any fee to be paid hereunder or in connection herewith is to be calculated on the basis of a 360-day or 365-day year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360 or 365, as applicable. The rates of interest under this Agreement are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement. The Borrower acknowledges and confirms that: (a) this Agreement, and the constituent definitions herein and under the other documents relating to interest and other amounts payable hereunder and thereunder, satisfies the requirements of section 4 of the Interest Act (Canada) to the extent that section 4 of the Interest Act (Canada) applies to the expression, statement or calculation of any rate of interest or other rate per annum hereunder or under any other document; (b) the Borrower is able to calculate the yearly rate or percentage of interest payable under any document based on the methodology set out herein and under the other documents, and the constituent definitions herein and under the other documents relating to interest and other amounts payable hereunder and thereunder; and (c) it waives its right to object to the payment of interest hereunder on the basis of inadequate disclosure as required under section 4 of the Interest Act (Canada). |
| (f) | If any provision of this Agreement would oblige the Borrowers to make any payment of interest or other amount payable to any Lender in an amount or calculated at a rate which would be prohibited by any Applicable Law or would result in a receipt by that Lender of "interest" at a "criminal rate" (as such terms are construed under the Criminal Code (Canada)), then, notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by Applicable Law or so result in a receipt by that Lender of "interest" at a "criminal rate", such adjustment to be effected, to the extent necessary (but only to the extent necessary), as follows: |
| (i) | first, by reducing the amount or rate of interest required to be paid to the affected Lender; and |
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| (ii) | thereafter, by reducing any fees, commissions, costs, expenses, premiums and other amounts required to be paid to the affected Lender which would constitute interest for purposes of section 347 of the Criminal Code (Canada). |
| SECTION 2.06 | ADVANCES. |
| (a) | The Borrower shall notify the Administrative Agent in writing pursuant to a Borrowing Request not later than 3:00 PM (Toronto time) (i) if the amount of the requested advance exceeds $25,000,000, ten (10) Business Days; or (ii) if the amount of the requested advance is less than or equals $25,000,000, three (3) Business Days before each requested Advance, specifying the amount of the Advance to be made; provided that (A) the minimum amount the Borrower may specify in such request for an Advance is $250,000 and (B) no Borrowing Date shall be on the first Business Day in any calendar week. Such Borrowing Request shall be certified by a senior officer of the General Partner (or such other authorized Person as Borrower directs from time to time) of the Borrower. |
| (b) | The Administrative Agent shall give to each applicable Lender prompt notice on the date of the Administrative Agent's receipt of each Borrowing Request. On the date on which an Advance is requested to be made pursuant to the applicable Borrowing Request, each applicable Lender will make available to the Administrative Agent at the address of the Administrative Agent set forth in SECTION 8.01, in immediately available funds, its Applicable Percentage of such Advance requested to be made. Unless the Administrative Agent shall have been notified by any Lender prior to the date of Advance that such Lender does not intend to make available to the Administrative Agent its portion of the Advance to be made on such date, the Administrative Agent may assume that such Lender will make such amount available to the Administrative Agent as required above and the Administrative Agent may, in reliance upon such assumption, make available the amount of the Advance to be provided by such Lender. Upon fulfillment of the conditions set forth in SECTION 2.06(a) and SECTION 4.02 for such Advance, and as soon as practicable after receipt of funds from the Lenders, will make such funds as have been received from the Lenders available to the Borrower at the account specified by the Borrower in such Borrowing Request. In the event that any additional Lenders become party to this Agreement by way of an Assignment and Assumption, the parties hereto will negotiate in good faith with a paying agent to become a party to this Agreement and be responsible for payment and remittance functions currently undertaken by the Administrative Agent and to make any necessary amendments as required to this Agreement. |
| (c) | To administer the Loans in an efficient manner and to minimize the transfer of funds between the Administrative Agent and the Lenders, the Lenders hereby instruct the Administrative Agent, and the Administrative Agent may (in its sole discretion, without any obligation) (i) make available, on behalf of the Lenders, the full amount of all Advances requested by the Borrower, without giving each Lender prior notice of the proposed Advance, of such Lender's Applicable Percentage thereof and the other matters covered by the Borrowing Request and (ii) if the Administrative Agent has made any such amounts available as provided in clause (i), upon repayment of the Loans by the Borrower, first apply such amounts repaid directly to the amounts made available by the Administrative Agent in accordance with clause (i) and not yet settled as described below. If the Administrative Agent makes an Advance on behalf of the Lenders, as provided in the immediately preceding sentence, the amount of outstanding Loans and each Lender's Applicable Percentage thereof shall be computed weekly rather than daily and shall be adjusted upward or downward on the basis of the amount of outstanding Loans as of 5:00 P.M. (Toronto time) on the Business Day immediately preceding the date of each computation; provided, however, that the Administrative Agent retains the absolute right at any time or from time to time to make the afore-described adjustments at intervals more frequent than weekly. On the Business Day prior to each Reporting Date, the Administrative Agent shall deliver to each Lender and holder of any Note a summary statement of the type and amount of outstanding Loans for such period (such week or lesser period or periods being hereafter referred to as a "Lender Reporting Period"). If the summary statement is sent by the Administrative Agent and received by the Lenders prior to 1:00 P.M. (Toronto time) on any Business Day each Lender shall make the transfers described in the next succeeding sentence no later than 3:00 P.M. (Toronto time) on the day such summary statement was sent; and if such summary statement is sent by the Administrative Agent and received by the Lenders after 1:00 P.M. (Toronto time) on any Business Day, each Lender shall make such transfers no later than 3:00 P.M. (Toronto time) no later than the next succeeding Business Day after such summary statement was sent. If in any Lender Reporting Period, the amount of a Lender's Applicable Percentage of the Loans is in excess of the amount of Loans actually funded by such Lender, such Lender shall forthwith (but in no event later than the time set forth in the next preceding sentence) transfer to the Administrative Agent by wire transfer in immediately available funds the amount of such excess; and, on the other hand, if the amount of a Lender's Applicable Percentage of the Loans in any Lender Reporting Period is less than the amount of Loans actually funded by such Lender, the Administrative Agent shall forthwith transfer to such Lender by wire transfer in immediately available funds the amount of such difference. The obligation of each Lender to transfer such funds shall be irrevocable and unconditional, without recourse to or warranty by the Administrative Agent and made without setoff or deduction of any kind. The Administrative Agent and each of the Lenders agree to mark their respective books and records at the end of each Collection Period to show at all times the dollar amount of their respective Applicable Percentages of the outstanding Loans. Because the Administrative Agent on behalf of the Lenders may be advancing and/or may be repaid Loans prior to the time when the Lenders will actually advance and/or be repaid Loans, interest with respect to Loans shall be allocated by the Administrative Agent to each Lender (including Administrative Agent) in accordance with the type and amount of Loans actually advanced by and repaid to each Lender (including the Administrative Agent) during each Collection Period and shall accrue from and including the date such Advance is made by the Administrative Agent to but excluding the date such Loans are repaid by the Borrower in accordance with SECTION 2.14 or actually settled by the applicable Lender as described in this SECTION 2.06(c). All such Advances made by the Administrative Agent on behalf of the Lenders hereunder shall bear interest at the applicable interest rate for such Advances. |
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| (d) | If the amounts described in subsection (b) or (c) of this SECTION 2.06 are not in fact made available to the Administrative Agent by a Lender (such Lender being hereinafter referred to in this SECTION 2.06 as a "Defaulting Lender") and the Administrative Agent has made such amount available to the Borrower, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Defaulting Lender. If such Defaulting Lender does not pay such corresponding amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent shall promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to recover from such Defaulting Lender and the Borrower, (i) interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to either (A) if paid by such Defaulting Lender, the overnight federal funds rate or (B) if paid by the Borrower, the Applicable Rate, calculated in accordance with SECTION 2.05, plus (ii) in each case, an amount equal to any costs (including reasonable legal expenses) and losses incurred as a result of the failure of such Defaulting Lender to provide such amount as provided in this Agreement. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any default by such Lender hereunder, including, without limitation, the right of the Borrower to seek reimbursement from any Defaulting Lender for any amounts paid by the Borrower under clause (ii) above on account of such Defaulting Lender's default. |
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| (e) | The failure of any Lender to make its portion of the Advance to be made by it as part of any Advance shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Advance. The amounts payable by each Lender shall be a separate and independent obligation. |
| (f) | Each Lender shall be entitled to earn interest at the Applicable Rate, calculated in accordance with SECTION 2.05, on outstanding Loans which it has funded to the Administrative Agent from the date such Lender funded such Advance to, but excluding, the date on which such Lender is repaid with respect to the Loan. |
| (g) | The Administrative Agent shall not be obligated to transfer to any Defaulting Lender any payments made by the Borrower to the Administrative Agent for the Defaulting Lender's benefit; nor will a Defaulting Lender be entitled to the sharing of any payments hereunder. Amounts payable to a Defaulting Lender shall instead be paid to or retained by the Administrative Agent. The Administrative Agent may hold and, in its discretion, re-lend to a Borrower the amount of all such payments received or retained by it for the account of such Defaulting Lender. Any amounts so re-lent to the Borrower shall earn interest at the Applicable Rate hereunder and for all other purposes of this Agreement shall be treated as if they were Advances; provided, however, that for purposes of voting or consenting to matters with respect to the Loan Documents and determining Applicable Percentages, such Defaulting Lender shall be deemed not to be a "Lender", and each of such Defaulting Lender's Commitment and the unpaid principal balance of the Advances owing to such Defaulting Lender shall be deemed to be zero (-0-). Until a Defaulting Lender cures its failure to fund its pro rata share of any Advance, such Defaulting Lender shall not be entitled to any portion of the Unused Additional Interest payable pursuant to SECTION 2.09(a). This SECTION 2.06(g) shall remain effective with respect to such Lender until such time as the Defaulting Lender shall no longer be in default of any of its obligations under this Agreement. The terms of this SECTION 2.06(g) shall not be construed to increase or otherwise affect the Commitment of any Lender, or relieve or excuse the performance by Borrower of its duties and obligations hereunder or under any of the other Loan Documents. Nothing contained in this SECTION 2.06 or otherwise in this Agreement shall impair or limit any claim of the Borrower against a Defaulting Lender (including, without limitation, expenses incurred by the Borrower by reason of any such default) who breaches its commitment to fund Advances hereunder. |
| (h) | Each request for an Advance pursuant to this SECTION 2.06 shall be irrevocable and binding on the Borrower. |
| SECTION 2.07 | Increased Commitments. |
| (a) | The Borrower shall have the right to request an increase to the Commitments by obtaining additional Commitments, from one or more of the Lenders provided that (i) any such request for an increase shall be in a minimum amount of [* * * * *], (ii) after giving effect thereto, the sum of the total of the Commitments does not exceed [* * * * *], and (iii) the procedure described in SECTION 2.07(b) have been satisfied. Nothing contained in this SECTION 2.07 shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to increase its Commitment hereunder at any time. For greater certainty, any such increase request made by the Borrower may be accepted or rejected at the sole discretion of each Lender. |
| (b) | Any amendment hereto for such an increase or addition shall be in form and substance satisfactory to the Administrative Agent and shall require the written signatures of the Administrative Agent, the Borrower and each Lender agreeing to an increase in their Commitment. As a condition precedent to such an increase or addition, the Borrower shall deliver to the Administrative Agent (i) a certificate signed by its authorized officer (A) certifying and attaching the resolutions adopted by it approving or consenting to such increase, and (B) certifying that, before and after giving effect to such increase or addition, (1) the representations and warranties contained in Article 3 and the other Loan Documents are true and correct, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and (2) no Default exists, (ii) legal opinions and documents consistent with those delivered on the Effective Date, to the extent requested by the Administrative Agent and (iii) each guarantor that has provided a Guarantee, of any type, in connection with the Secured Obligations for the benefit of the Secured Parties will confirm, in form and substance satisfactory to the Administrative Agent, that its Guarantee and any related security will continue to apply after giving effect to such increase or addition to the Commitments made pursuant to this Section 2.07. |
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| (c) | Notwithstanding anything to the contrary in this Section 2.07, the Administrative Agent may at any time during the 90 day period following the occurrence of a Right to Increase Trigger Event, provide written notice to the Borrower that the Maximum Principal Amount and Commitments shall be increased in one or more incremental amounts of [* * * * *] (the "Right to Increase") to an amount not to exceed, in aggregate with the initial Commitments hereunder, a total amount of [* * * * *]. Such notice shall also indicate the effective date of such increase which shall be a date occurring at least 5 Business Days following the date of such notice (the "Right to Increase Effective Date"). In addition, on or before the Right to Increase Effective Date, the Borrower will deliver to the Administrative Agent the items set out in Section 2.07(b). If the Right to Increase is exercised by the Administrative Agent, the Administrative Agent will, in its sole discretion, increase or adjust the Commitment of any Lender subject to such Lender agreeing to such increase or adjustment. |
| (d) | On the effective date of any such increase or addition, (i) any Lender increasing its Commitment shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase or addition and the use of such amounts to make payments to such other Lenders, each Lender's portion of the outstanding Loans of all the Lenders to equal its revised Applicable Percentage of such outstanding Loans, and the Administrative Agent shall make such other adjustments among the Lenders with respect to the Loans then outstanding and amounts of principal, interest, commitment fees and other amounts paid or payable with respect thereto as shall be necessary, in the opinion of the Administrative Agent, in order to effect such reallocation and (ii) the Borrower shall be deemed to have repaid and reborrowed all outstanding Loans as of the date of any increase (or addition) in the Commitments. The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid. Within a reasonable time after the effective date of any increase or addition, the Administrative Agent shall, and is hereby authorized and directed to, revise the Commitment Schedule to reflect such increase or addition and shall distribute such revised Commitment Schedule to each of the Lenders and the Borrower, whereupon such revised Commitment Schedule shall replace the old Commitment Schedule and become part of this Agreement. |
| SECTION 2.08 | commitment REDUCTIONS AND PREPAYMENTS. |
| (a) | Voluntary Commitment Reductions. The Borrower may elect to terminate the Commitments in whole (but not in part) so long as (A) the Borrower provides the Administrative Agent with at least sixty (60) days prior written notice which shall be irrevocable (but may be conditioned upon the effectiveness of other credit or debt facilities or other refinancing arrangements or other conditions), and (B) the Borrower promptly (and in any event, within three (3) Business Days) pays to the Administrative Agent the Exit Additional Interest due on the terminated Commitments and all other Secured Obligations payable on such date. |
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| (b) | Voluntary Prepayments. |
| (i) | On any Monthly Settlement Date, the Borrower may voluntarily prepay the outstanding Aggregate Exposure in whole or in part (including in connection with a Securitization Transaction in accordance with the terms of SECTION 5.40), in accordance with SECTION 2.03, by delivering a Repayment Notice to the Finance Parties on the Reporting Date as part of the Servicing Report; on any other Business Day, the Borrower may voluntarily prepay the outstanding Aggregate Exposure in whole or in part in connection with a Securitization Transaction in accordance with the terms of SECTION 5.40 by delivering a Repayment Notice to the Finance Parties, in which case the Financing Transaction Prepayment Amount and any other Available Amounts shall be applied on such Business Day in accordance with SECTION 2.03 as if such date was a Weekly Settlement Date (but not a Monthly Settlement Date). |
| (ii) | Any prepayment of Loans shall not reduce a Lenders' Commitments under this Agreement and may be reborrowed, subject to the terms and conditions hereof for borrowing under the Loan. |
| (iii) | For the avoidance of doubt, any voluntary prepayments under this SECTION 2.08(b) (A) will be free of any Exit Additional Interest due on the terminated Commitments, and (B) will be applied at the time and in the manner set forth in SECTION 2.03. |
| (iv) | Mandatory Prepayments. In the event that amounts outstanding hereunder at any time exceed the Borrowing Base (whether established by a Borrowing Request, a Borrowing Base Certificate or otherwise), within three (3) Business Days of the time that a Borrowing Base calculation was delivered or required to be delivered, the Borrower shall pay to the Administrative Agent without demand or notice of any kind required, unless waived in writing by the Administrative Agent, the amount by which the Borrower's indebtedness hereunder exceeds the Borrowing Base then applicable, together with all accrued interest on the amount so paid and any fees and costs incurred in connection therewith. For the avoidance of doubt, any mandatory prepayment pursuant to this SECTION 2.08(b)(iv) shall not be subject to the Exit Additional Interest due on the terminated Commitments. Notwithstanding SECTION 2.03, any such payment shall be applied, to the extent of such payment, to the Loan until its Aggregate Exposure is reduced to zero; provided that any such mandatory prepayment of Loans shall not reduce a Lenders' Commitments under this Agreement and may be reborrowed, subject to the terms and conditions hereof for borrowing under the Loan. |
| SECTION 2.09 | FEES. |
In consideration of each Lender's Commitments, the Borrower will pay to the Lenders (in accordance with their Applicable Percentage) (other than the fee described in (d) which is solely for the account of the Administrative Agent and shall not be distributed to the Lenders) the fees in the amounts and at the times set forth in this Agreement and the other Loan Documents and in any other agreements between the Borrower and the Lenders from time to time, as applicable, including:
| (a) | Unused Additional Interest. On each Monthly Settlement Date, a fee in an amount of (i) the Unused Additional Interest Rate, multiplied by (ii) the average daily unused Commitments, computed on the basis of a three hundred sixty (360) day year and the actual number of days elapsed; |
| (b) | Minimum Utilization Additional Interest. On each Monthly Settlement Date, minimum utilization interest ("Minimum Utilization Additional Interest"), if any, in an amount equal to (i) the average Daily Minimum Utilization Shortfall Amount since (and including) the immediately prior Monthly Settlement Date (but excluding the current Monthly Settlement Date) multiplied by (ii) the Applicable Rate divided by (iii) 360 multiplied by (iv) the number of days that have elapsed since (and including) the immediately prior Monthly Settlement Date (but excluding the current Monthly Settlement Date); |
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| (c) | Original Issue Discount. On the Closing Date and following any increase in the aggregate Commitments after the Closing Date, the funded amount of (i) the initial Advance hereunder and (ii) the first Advance following any such increase of the aggregate Commitments, as applicable, shall be reduced by an amount equal to Original Issue Discount Rate multiplied by (x) in the case of the initial Advance hereunder, the Commitments or (y) in the case of any increase in the aggregate Commitments after the Closing Date, the amount by which the aggregate Commitments were increased (the "Original Issue Discount Amount"), which Original Issue Discount Amount shall be retained by the Lenders providing the initial Advance or such first Advance following any increase in the aggregate Commitments; provided that, for clarity, the Borrower shall remain liable to pay the full principal amount of such Advance (inclusive of such Original Issue Discount Amount) notwithstanding the deduction of the Original Issue Discount Amount; and |
| (d) | Administrative Agent Fee. Commencing on the Closing Date and in advance on a quarterly basis thereafter, a fee in an amount equal to the Administrative Agent Fee Amount. |
| SECTION 2.10 | Controlled Accounts. |
The Borrower shall have caused to be established and maintained, a deposit account with the Transaction Account Bank, in the name of the Borrower, designated as the "Transaction Account", as to which the Administrative Agent shall obtain control, for the benefit of the Lenders, within 30 days of the Closing Date pursuant to the Transaction Account Blocked Account Agreement. Each Credit Party, as applicable, shall enter into the Transaction Account Blocked Account Agreement and a Control Agreement in respect of each other deposit or securities account maintained by such Credit Party within 30 days of the Closing Date or, in respect of deposit or securities accounts established after the Closing Date, within 30 days of such establishment, in each case in form and substance satisfactory to the Administrative Agent, acting reasonably.
| SECTION 2.11 | Hedging PROCEEDS. |
All amounts paid by the counterparty under any Interest Rate Cap to the Borrower or to the Administrative Agent (for the avoidance of doubt, including any payments upon a termination of any Interest Rate Cap) or any proceeds of sale of any Interest Rate Cap shall be immediately deposited into the Transaction Account for application in accordance with SECTION 2.03.
| SECTION 2.12 | Increased Costs. |
| (a) | If any Change in Law shall: |
| (i) | impose, modify or deem applicable any reserve, special deposit, liquidity or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender; |
| (ii) | impose on any Lender any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or participation therein; or |
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| (iii) | subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (e) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, |
and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender or such other Recipient hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.
| (b) | If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender's capital or on the capital of such Lender's holding company, if any, as a consequence of this Agreement, the Commitments of, or the Loans made by such Lender to a level below that which such Lender or such Lender's holding company could have achieved but for such Change in Law (taking into consideration such Lender's policies and the policies of such Lender's holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender, as the case may be, such additional amount or amounts as will compensate such Lender or such Lender's holding company for any such reduction suffered. |
| (c) | A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof. |
| (d) | Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof. |
| SECTION 2.13 | Withholding of Taxes; Gross-Up. |
| (a) | Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this SECTION 2.13) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made. |
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| (b) | Payment of Other Taxes. The Borrower shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes. |
| (c) | Evidence of Payment. As soon as practicable after any payment of Indemnified Taxes (or other withholding Taxes) by the Borrower to a Governmental Authority pursuant to this SECTION 2.13, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. |
| (d) | Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this SECTION 2.13) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. |
| (e) | Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender's failure to comply with the provisions of SECTION 8.04(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to such Lender from any other source against any amount due to the Administrative Agent under this paragraph (e). |
| (f) | Status of Lenders. |
| (i) | Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in SECTION 2.13(f)(ii)(A), SECTION 2.13(f)(ii)(B) and SECTION 2.13(f)(ii)(D) below) shall not be required if in the Lender's reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender. |
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| (ii) | Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person, |
| (A) | any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), an executed IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax; |
| (B) | any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable: |
| (1) | in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (i) with respect to payments of interest under any Loan Document, an executed IRS Form W-8BEN or IRS Form W 8BEN E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the "interest" article of such tax treaty and (ii) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W 8BEN E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the "business profits" or "other income" article of such tax treaty; |
| (2) | in the case of a Foreign Lender claiming that its extension of credit will generate U.S. effectively connected income, an executed IRS Form W-8ECI; |
| (3) | in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (i) a certificate substantially in the form of EXHIBIT D-1 to the effect that such Foreign Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, a "10 percent shareholder" of a Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a "controlled foreign corporation" described in Section 881(c)(3)(C) of the Code (a "U.S. Tax Compliance Certificate") and (ii) an executed IRS Form W-8BEN or IRS Form W 8BEN E, as applicable; or |
| (4) | to the extent a Foreign Lender is not the beneficial owner, an executed IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W 8BEN E, as applicable, a U.S. Tax Compliance Certificate substantially in the form of EXHIBIT D-2 or EXHIBIT D-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of EXHIBIT D-4 on behalf of each such direct and indirect partner; |
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| (C) | any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and |
| (D) | if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), "FATCA" shall include any amendments made to FATCA after the date of this Agreement. |
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
| (g) | Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified pursuant to SECTION 2.13 (including by the payment of additional amounts pursuant to SECTION 2.13) it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this SECTION 2.13 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favourable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph (g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person. |
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| (h) | Survival. Each party's obligations under this SECTION 2.13 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document. |
| (i) | Defined Terms. For purposes of this SECTION 2.13, the term "Applicable Law" includes FATCA. |
| SECTION 2.14 | Payments Generally; Allocation of Proceeds; Sharing of Set-offs. |
| (a) | The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest or fees, or of amounts payable under SECTION 2.12, SECTION 2.13 or otherwise) prior to 2:00 p.m., Toronto time, on the date when due in immediately available funds, without set off or counterclaim of any kind. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars. All such payments shall be made to the Administrative Agent at address referred to in SECTION 8.01, except that payments pursuant to SECTION 2.12, SECTION 2.13 and SECTION 8.03 shall be made directly to the Persons entitled thereto. As soon as practicable after the Administrative Agent receives payment from the Borrower, but in no event later than one (1) Business Day after such payment has been made, subject to SECTION 2.06, the Administrative Agent will cause to be distributed like funds relating to the payment of principal, interest or fees (other than amounts payable to the Administrative Agent to reimburse the Administrative Agent for fees and expenses payable solely to the Administrative Agent pursuant to the terms of this Agreement) or expenses payable to the Administrative Agent, any holders of Notes and the Lenders in accordance with the terms of this Agreement, in like funds relating to the payment of any such other amounts payable to the Lenders. The Borrower's obligations to the Lenders and any holders of Notes with respect to such payment shall be discharged by making such payments to the Administrative Agent pursuant to this SECTION 2.14 or, if not timely paid or any Event of Default then exists, may be added to the principal amount of the Loans outstanding. For the avoidance of doubt, all Collections shall be transferred to the Transaction Account on a daily basis. |
| (b) | If, except as otherwise expressly provided herein, any Lender shall, by exercising any right of set off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other similarly situated Lender, then the Lenders receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lender rateably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation. |
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| (c) | Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. |
| (d) | If any Lender shall fail to make any payment required to be made by it hereunder, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender's obligations hereunder until all such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender hereunder. Application of amounts pursuant to (i) and (ii) above shall be made in any order determined by the Administrative Agent in its discretion. |
| (e) | The Administrative Agent may from time to time provide the Borrower with billing statements or invoices with respect to any of the Secured Obligations (the "Billing Statements"). The Administrative Agent is under no duty or obligation to provide Statements, which, if provided, will be solely for the Borrower's convenience. Statements may contain estimates of the amounts owed during the relevant billing period, whether of principal, interest, fees or other Secured Obligations. If the Borrower pays the full amount indicated on a Billing Statement on or before the due date indicated on such Billing Statement, the Borrower shall not be in default of payment with respect to the billing period indicated on such Billing Statement; provided, that acceptance by the Administrative Agent, on behalf of the Lenders, of any payment that is less than the payment due at that time shall not constitute a waiver of the Administrative Agent's or the Lenders' right to receive payment in full at another time. |
| SECTION 2.15 | Mitigation Obligations; Replacement of Lender. |
| (a) | If any Lender requests compensation under SECTION 2.12, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to SECTION 2.13, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to SECTION 2.12 or SECTION 2.13, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. |
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| (b) | If any Lender requests compensation under SECTION 2.12, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to SECTION 2.13, or if any Lender becomes a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in SECTION 8.04), all its interests, rights (other than its existing rights to payments pursuant to SECTION 2.12 or SECTION 2.13) and obligations under this Agreement and other Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under SECTION 2.12 or payments required to be made pursuant to SECTION 2.13, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. |
| SECTION 2.16 | Defaulting Lender. |
Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
| (a) | fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to SECTION 2.09; and |
| (b) | such Defaulting Lender shall not have the right to vote on any issue on which voting is required (other than to the extent expressly provided in SECTION 8.02(c)) and the Commitment and Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders or the Supermajority Lender or the Required Lenders or the Supermajority Lender have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to SECTION 8.02) or under any other Loan Document; provided, that, except as otherwise provided in SECTION 8.02, this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby. |
| SECTION 2.17 | Returned Payments. |
If after receipt of any payment which is applied to the payment of all or any part of the Secured Obligations (including a payment effected through exercise of a right of setoff), the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason (including pursuant to any intercreditor agreement or subordination agreement or pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion), then the Secured Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender. The provisions of this SECTION 2.17 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds. The provisions of this SECTION 2.17 shall survive the termination of this Agreement.
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Article 3
Representations and Warranties.
Each Credit Party hereby represents and warrants as of the date hereof, as of each Weekly Settlement Date and as of each date on which an Advance is made, that:
| SECTION 3.01 | Status and Authority. |
The Borrower has been formed and is existing as a limited partnership under the laws of the Province of Ontario. The General Partner is duly organized and validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all necessary power, capacity and authority to (i) carry on its business as presently carried on by it, including in its capacity as general partner of the Borrower, (ii) execute and deliver each Transaction Document to which the Borrower is a party and to perform the Borrower's obligations thereunder, in each case, in its capacity as general partner of the Borrower, and (iii) execute and deliver the Partnership Agreement and each Transaction Document to which it is or will be a party and to perform its obligations thereunder.
| SECTION 3.02 | Location. |
Its principal place of business, chief executive office and registered office are located at the addresses set forth in SECTION 8.01.
| SECTION 3.03 | Partnership Agreement. |
The Partnership Agreement grants to the General Partner all necessary power and authority to, in its capacity as general partner of the Borrower enter into and perform the obligations of the Borrower under this Agreement and each other Transaction Document to which the Borrower is or will be a party or by which it is or will be bound.
| SECTION 3.04 | Names. |
It has not used any legal names, trade names or assumed names other than the name in which it has executed this Agreement.
| SECTION 3.05 | Identification number. |
The Canada Revenue Agency Business Number is [* * * * *] with respect to the Borrower and [* * * * *] with respect to the General Partner.
| SECTION 3.06 | Organization and powers. |
(i) The Borrower is a limited partnership validly formed and existing under the laws of the Province of Ontario, (ii) it is duly qualified to carry on its business in each jurisdiction in which it carries on business, and (iii) none of its Organizational Documents have been amended or rescinded.
| SECTION 3.07 | Ownership Structure. |
As of the date hereof, the ownership structure and equity holdings for the Borrower, the General Partner and any limited partners of the Borrower is set out in Schedule 2.
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| SECTION 3.08 | Authority; No conflict or violation. |
The execution and delivery by it of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations under this Agreement or thereunder:
| (a) | are within its organizational powers and have been duly authorized by the Organizational Documents; |
| (b) | will not require any authorization, consent, approval, order, filing, registration or qualification by or with any Governmental Authority, except those that have been obtained and are in full force and effect; |
| (c) | do not violate any provision of (i) any Applicable Law or of any order, writ, injunction or decree presently in effect having applicability to it save to the extent that any violation has not had and could not reasonably be expected to have a Material Adverse Effect; or (ii) its Organizational Documents; |
| (d) | will not contravene or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which it is a party or by which it may be bound or affected; and |
| (e) | will not result in, or require, the creation or imposition of any Lien or other charge or encumbrance of any nature upon or with respect to any of the assets now owned or hereafter acquired by it, in each case, other than pursuant to the Transaction Documents. |
| SECTION 3.09 | Due execution. |
This Agreement and each of the other Transaction Documents to which it is a party have been duly authorized, executed and delivered by it.
| SECTION 3.10 | Enforceability. |
This Agreement has been duly executed and delivered by the General Partner on behalf of the Borrower, in its capacity as general partner of the Borrower and in its own capacity. Each Transaction Document to which the Borrower is a party constitutes (or will, when executed and delivered constitute) a legal, valid and binding obligation of the Borrower and the General Partner, enforceable against each of them, in accordance with its terms, subject only to the discretion that a court may exercise in granting equitable remedies and any limitation under laws relating to bankruptcy, insolvency, moratorium, fraudulent preference, reorganization or other laws affecting creditors' rights generally from time to time in effect. Each Transaction Document to which the General Partner is party constitutes (or will, when executed and delivered constitute) a legal, valid and binding obligation of the General Partner, enforceable against it, in accordance with its terms, subject only to the discretion that a court may exercise in granting equitable remedies and any limitation under laws relating to bankruptcy, insolvency, moratorium, fraudulent preference, reorganization or other laws affecting creditors' rights generally from time to time in effect.
| SECTION 3.11 | Compliance with laws, etc. |
Each Borrower Party has complied with all Applicable Laws except to the extent that non-compliance does not have or could not reasonably be expected to have a Material Adverse Effect. Each Borrower Party has in place a compliance management system appropriate for its respective size and complexity.
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| SECTION 3.12 | Litigation. |
There are no actions, suits, investigations, litigation or proceedings at law or in equity or by or before any Governmental Authority, in arbitration now commenced, or to the best of its knowledge, pending or threatened against or affecting any Borrower Party which has not previously been disclosed by such Person to (and waived in writing by) the Lenders and that:
| (a) | asserts the invalidity of this Agreement or any other Transaction Document; |
| (b) | seeks to prevent the grant of a security interest in any Collateral by the Borrower to the Administrative Agent, the ownership or acquisition by the Borrower of any Eligible Receivables or other Collateral or the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document; or |
| (c) | could otherwise (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect if determined against such Person. |
| SECTION 3.13 | Insolvency Event; Solvency. |
(i) No Insolvency Event has occurred in respect of any Credit Party or the Parent Guarantor and no step has been taken or is intended to be taken by it or, to the best of its knowledge and belief, by any other Person that would constitute an Insolvency Event in respect of such Person and (ii) giving effect to the transactions contemplated by this Agreement and the other Transaction Documents will not cause an Insolvency Event to occur.
| SECTION 3.14 | Payments to applicable Sellers. |
With respect to each Receivable sold or contributed to it, the Borrower has given reasonably equivalent value to the applicable Seller in consideration therefor and such transfer was not made for or on account of an antecedent debt.
| SECTION 3.15 | Sales not voidable. |
No transfer by the applicable Seller of any Receivable to the Borrower under the Sale and Servicing Agreement is or may be voidable under any section of any Insolvency Law or otherwise (including, for the avoidance of doubt, under any assignments for the benefit of creditors, preferences and fraudulent conveyances laws of Canada or any province therein or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally).
| SECTION 3.16 | Perfection. |
Assuming the filing of the financing statements or other similar instruments or documents necessary under the PPSA approved by it on the Closing Date, this Agreement, together with such financing statements or documents, is effective to create in favour of the Administrative Agent, for the benefit of the Secured Parties, a valid and perfected security interest in the Collateral, free and clear of any Lien except for Permitted Encumbrances.
| SECTION 3.17 | Good title. |
It is the legal and beneficial owner of each Receivable sold or contributed to it free and clear of any Lien except for Permitted Encumbrances.
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| SECTION 3.18 | Bank accounts. |
The Transaction Account constitutes an "intangible" within the meaning of the PPSA and the Borrower or the General Partner, as applicable, has good and marketable title to the Transaction Account, free and clear of any Lien.
| SECTION 3.19 | Control of Transaction Account. |
It has not granted any Person (other than the Administrative Agent and the Servicers and their respective assigns) access to or control of the Transaction Account held in its name, or the right to take dominion and control of the Transaction Account at a future time or upon the occurrence of a future event.
| SECTION 3.20 | No Material Event. |
Save to the extent previously disclosed to the Lenders in writing, no event has occurred and is continuing and no condition exists, that constitutes or may reasonably be expected to constitute a Collateral Trigger Event, a Level 1 Regulatory Trigger Event, an Amortization Event or an Event of Default.
| SECTION 3.21 | Accuracy of information. |
Any written information furnished by it pursuant to the Transaction Documents, excluding any Projections, but including any information relating to the Receivables and all information set out in each Servicing Report (the "Information") is true and correct in all material respects as of its date and no such Information contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not materially misleading. Any Projections have been made in good faith and are not misleading.
| SECTION 3.22 | Financial Statements. |
Without prejudice to the generality of SECTION 3.21 above, all of its financial information (other than projections) which have been furnished to the Administrative Agent or any of the Lenders and described in SECTION 5.19 have been prepared in accordance with GAAP and present fairly in all material respects the financial condition and results of operations of the Borrower Parties, as at such dates and for such periods in accordance with GAAP, subject, in the case of unaudited financial statements, to changes resulting from normal year-end audit adjustments and the absence of footnotes.
| SECTION 3.23 | Taxes. |
It is not a non-resident of Canada within the meaning of the ITA and has timely (taking into account any extensions) (i) filed, or cause to be filed, all tax returns (federal, provincial, foreign and local) required to be filed by it and (ii) paid, or caused to be paid, all Taxes, assessments and other governmental charges, if any, required to have been paid by it other than Taxes, assessments and other governmental charges being contested in good faith by appropriate proceedings and as to which adequate reserves have been provided in accordance with GAAP.
| SECTION 3.24 | Tax status. |
The General Partner is a corporation resident in Canada for the purposes of the ITA. The sole business of the General Partner is to be the general partner of the Borrower and the General Partner holds no assets in its own capacity other than a general partner interest in the borrower.
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| SECTION 3.25 | Volcker rule; Investment Company Act. |
It (i) is not a "covered fund" under the Volcker Rule and (ii) is not required to register as, an "investment company" within the meaning of the Investment Company Act.
| SECTION 3.26 | Anti-Money Laundering/International Trade Law Compliance. |
| (a) | It (A) is not a Sanctioned Person, (B) has no assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person, or (C) does not do business in or with, or derive any of its operating income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any law or directive enforced by any sanctions authority. |
| (b) | The funds used to repay the Indebtedness and other obligations under this Agreement and the other Transaction Documents are not derived from any unlawful activity. |
| (c) | None of (i) the Borrower Parties, nor any of their directors or officers or (ii) to the knowledge of the Credit Parties, nor any employee, Affiliate or agent of the Borrower Parties is a Sanctioned Person. |
| SECTION 3.27 | Anti-Terrorism Laws. |
Each Borrower Party:
| (a) | is not in violation in any material respect of any Anti-Terrorism Law and does not engage in or conspire to engage in any material respect in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law; |
| (b) | is not a Blocked Person; and/or |
| (c) | does not (A) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (B) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224. |
| SECTION 3.28 | Policies and procedures. |
Each Borrower Party has implemented and maintains in effect policies and procedures designed to ensure its compliance and the compliance of its respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions and it and its respective officers and directors and, to its knowledge, its employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in it being designated as a Sanctioned Person.
| SECTION 3.29 | ERISA compliance and Canadian PENSION Plans. |
| (a) | Except as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, each Plan established or maintained by a Borrower Party or to which a Borrower Party contributes or is obligated to contribute, is in compliance with the applicable provisions of ERISA, the Code and other applicable federal and state law. |
| (b) | There are no pending or, to the knowledge of any Borrower Party, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to a Plan established or maintained by a Borrower Party or to which a Borrower Party contributes or is obligated to contribute, that would be reasonably be expected to have a Material Adverse Effect. |
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| (c) | (i) No ERISA Event has occurred and, to the actual knowledge of any Borrower Party or ERISA Affiliate, no such Person is aware of any fact, event or circumstance that would reasonably be expected to constitute or result in an ERISA Event, (ii) as of the most recent valuation date for any Borrower Party Plan, the present value of all accrued benefits under such Plan (based on the actuarial assumptions used to fund such Plan) did not exceed the value of the assets of such Plan allocable to such accrued benefits, (iii) no Borrower Party, nor any ERISA Affiliate has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due that are unpaid, and (iv) no Borrower Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA. |
| (d) | No Borrower Party maintains or contributes to, or has any liability in respect of, any Foreign Plan or Canadian Pension Plan. |
| SECTION 3.30 | Material Adverse Effect. |
To the best of its knowledge, no event has occurred that has had a Material Adverse Effect which has not previously been disclosed by such Person to (and waived in writing by) the Administrative Agent.
| SECTION 3.31 | Good title. |
The Borrower or the General Partner, as applicable, is the legal and beneficial owner of its assets, free and clear of any Lien except for Permitted Encumbrances.
| SECTION 3.32 | Employees. |
It does not have any employees.
| SECTION 3.33 | Receivables. |
As to the Receivables generally:
| (a) | the Borrower or the General Partner, as applicable, had and continues to have full power, authorization, permits, licenses and other authority to hold, enforce, and make the loans (or other extensions of credit) evidenced by the Receivables and all such Receivables and all Records comprising such Receivables are genuine and enforceable; |
| (b) | all Underlying Agreements in respect of Receivables have been duly authorized, executed, delivered by the parties whose names appear thereon and are valid and enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization or similar laws relating to the enforcement of creditors rights' or by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law, and consumer protection laws; |
| (c) | the form and content of all Underlying Agreements in respect of Receivables comply in all material respects (and in any event in all material respects necessary to maintain and ensure the validity and enforceability of the Receivables) with any and all Applicable Laws, rules and regulations; |
| (d) | the original amount and unpaid balance of each Receivable on the Borrower's Records and on any statement or schedule delivered to the Administrative Agent and/or any Lender, including without limitation pursuant to the Sale and Servicing Agreement, is and will be the true and correct amount actually owing to the Borrower as of the date each Receivable is pledged to the Administrative Agent or as of such date specified on such statement of schedule, and is not, to the best of the Borrower's knowledge, subject to any claim of reduction, counterclaim, set-off, recoupment or any other claim, allowance or adjustment; and the Borrower does not have any knowledge of any fact which would impair the validity or collectability of any Receivable; and |
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| (e) | the Borrower or the General Partner, as applicable, has good and valid title to the Purchased Assets, free and clear of all prior assignments, claims, liens, encumbrances and security interests, other than Permitted Encumbrances, and has the right to pledge and grant the Administrative Agent, for the benefit of the Lenders, a first priority security interest in the same, in the manner provided in the Transaction Documents. |
| SECTION 3.34 | Data Protection. |
| (a) | It is in compliance with all Data Requirements, and, in particular, all consents necessary for either it or the Sellers and the Servicers under Privacy Laws are in place to permit: (i) it to share such personal information with the Servicers, and (ii) it to use and disclose such personal information for the purposes intended hereby and under the Sale and Servicing Agreement. |
| (b) | It has not received from any Person or been required to give to any Person any notice, regarding any offense or alleged offense under Data Requirements, including any incident concerning or affecting Customer Data which gives rise to an obligation under Privacy Laws to notify a regulator. |
| (c) | It has not experienced loss or theft of any Customer Data, or accidental or unauthorised disclosure or access to Customer Data, including any unauthorized intrusions or security breaches of any IT asset which is owned or leased by it, in which Customer Data or other sensitive or confidential information (in each case, in its control or possession) was stolen or improperly accessed, used, or disclosed. |
| (d) | It has not received notice from any of its suppliers of IT assets that are not owned or leased by the it that any Customer Data or other sensitive or confidential information (in each case, in its control or possession) was stolen or improperly accessed, used, or disclosed. |
Article 4
Conditions
| SECTION 4.01 | Conditions to Effectiveness |
| (a) | Prior to the effectiveness of this Agreement, the Borrower shall have delivered or caused to be delivered to the Administrative Agent (all documents to be in form and substance satisfactory to the Administrative Agent in its Permitted Discretion): |
| (i) | Transaction Documents. This Agreement and all other Transaction Documents, evidenced by physical documents, duly and properly executed by the parties thereto; |
| (ii) | Searches. PPSA, insolvency and judgment searches against the Credit Parties and the Sellers and Initial Servicers in those offices and jurisdictions as the Administrative Agent shall reasonably request which shall show that no financing statement or other filings have been filed or remain in effect and no Liens remain in effect against the Credit Parties or the Sellers and Initial Servicers or any Collateral except for Permitted Encumbrances, financing statements, assignments or other filings, with respect to which the existing secured party has delivered to the Administrative Agent PPSA financing discharge statements or other documentation evidencing the termination of its Liens in the Collateral; |
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| (iii) | Organizational Documents. A copy of the Parent Guarantor's and each Credit Party's (i) organization documents, certified as of a recent date by such Person's secretary (or other appropriate officer), and (ii) bylaws, partnership agreement or operating agreement, as applicable, certified as of a recent date by such Person's secretary (or other appropriate officer); together with certificates of good standing existence or fact in the Parent Guarantor's or such Credit Party's, as the case may be, jurisdiction of organization and in each jurisdiction in which such Person is qualified to do business, each dated within thirty (30) days from the date of this Agreement; |
| (iv) | Financial Statements. Audited financial statements, financial projections and operational control documentation of each Borrower Party and their satisfactory review by the Administrative Agent; |
| (v) | Authorization Documents. Certified copies of resolutions of the Credit Parties and the Parent Guarantor authorizing or ratifying, as the case may be, the execution, delivery and performance of any Notes, this Agreement and all other Transaction Documents, the pledge of the Collateral to the Administrative Agent as security for the Secured Obligations including any borrowing evidenced by Notes and designating the appropriate officers to execute and deliver the Transaction Documents; |
| (vi) | Incumbency Certificates. A certificate of a senior officer of each of the Parent Guarantor and the General Partner (or other appropriate officer) as to the incumbency and signatures of officers of the Parent Guarantor and the General Partner (in its own right and in its capacity as general partner of the Borrower), as applicable, signing this Agreement, any Notes and other Transaction Documents to which the Parent Guarantor and/or each Credit Party is a party, as applicable; |
| (vii) | Opinion of Counsel. Written opinions of the Borrower's counsel addressed to the Administrative Agent and the Lenders, in form and substance satisfactory to the Administrative Agent; |
| (viii) | Officer's Certificate. A certificate, dated the date of this Agreement, signed by a senior officer of each of the Parent Guarantor and the General Partner (in its own right and in its capacity as general partner of the Borrower), to the effect that (i) all representations and warranties of such Person set forth in this Agreement and the other Transaction Documents, as applicable, are true and correct as of the date hereof in all material respects, including financial covenants set forth in Article 5 hereto and the Parent Guaranty, (ii) in respect of the Borrower, the Borrower is not subject to an Insolvency Event, and in respect of the Parent Guarantor, that the Parent Guarantor is not Insolvent and (iii) no Event of Default hereunder has occurred; |
| (ix) | Data Tape. A data tape containing information as to Borrower's receivables portfolio submitted as of the most recent month end; |
| (x) | Credit and Collection Policies. A copy of the final and complete Credit and Collection Policies; |
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| (xi) | Insurer Notification Letter. A copy of the Insurer Notification Letter, signed by way of acknowledgement by Canadian Premier Life Insurance Company; and |
| (xii) | Other Documents. Such additional documents as the Administrative Agent reasonably may request. |
| (b) | Prior to the effectiveness of this the Agreement, the Borrower shall have satisfied the following conditions in form and substance satisfactory to the Administrative Agent in its sole and absolute discretion: |
| (i) | Material Adverse Effect. No Material Adverse Effect shall have occurred and be continuing and the Borrower has not been liquidated, dissolved or terminated; |
| (ii) | Regulatory. Absence of a Regulatory Trigger Event; |
| (iii) | Agreed Upon Procedures. The completion of agreed upon procedures by a third-party in relation to the testing and cash flow tracking of the Receivables, and the implementation of any corrective actions identified in the Reports, each to the satisfaction of the Administrative Agent; |
| (iv) | Regulatory/Compliance review. Completion, to the satisfaction of the Administrative Agent, of a regulatory and compliance review with respect to the Borrower, the Receivables, the Transaction Documents and the transactions contemplated therein and of any corrective actions identified in the Reports; |
| (v) | PPSA filings. Delivery to the Administrative Agent of (i) Ontario PPSA filings in respect of the deemed security interest regarding the assignment of the Receivables from the Sellers to the Borrower, and (ii) Ontario PPSA filings in respect of the security interest created by the Borrower and the General Partner under the General Security Agreement; |
| (vi) | Intercompany Debt. Any Intercompany Debt in existence as at the Closing Date has been subordinated in all respects and fully postponed beyond the Maturity Date, to the satisfaction of the Administrative Agent, acting reasonably; |
| (vii) | Original Issue Discount. Retention of the Original Issue Discount Amount by the Lenders (in accordance with their Applicable Percentage), and |
| (viii) | Payments. Payment in cash by the Borrower to the Administrative Agent and any other relevant parties of all of the amounts that have become due and owing as of the Closing Date and all costs and expenses to the extent invoiced on or prior to the Closing Date. |
| (ix) | Parent Guarantor Term Loan Agreement. The Parent Guarantor shall have entered into and drawn or shall substantially contemporaneously enter into a draw of US$150,000,000 under that certain First Lien Credit Agreement, dated as of May 12, 2023 (the “Term Loan Agreement”) by and among the Parent Guarantor, as borrower, certain subsidiaries of the Parent Guarantor, as guarantors, the lenders party thereto, and Alter Domus (US) LLC, as administrative agent and collateral agent. |
| SECTION 4.02 | CONDITIONS TO ADVANCES. |
| (a) | [Reserved]. |
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| (b) | The obligation of the Lenders to make each subsequent Advance hereunder pursuant to SECTION 2.01 is conditioned upon: |
| (i) | Advance Requirements. The Borrower's satisfaction of each of the conditions specified in SECTION 2.01 and SECTION 2.06 as of the date of such Advance; |
| (ii) | Level 1 Regulatory Trigger Event, Amortization Event, Event of Default. The absence of any Level 1 Regulatory Trigger Event, Amortization Event or Event of Default or any event which with the giving of notice or the passage of time, or both, would become a Level 1 Regulatory Trigger Event, Amortization Event or Event of Default; |
| (iii) | Borrowing Base. The Borrower shall have delivered a Borrowing Request and Borrowing Base Certificate demonstrating that the outstanding amount of the Loans does not exceed the Borrowing Base after giving effect to such proposed Advance; and |
| (iv) | Costs and Expenses. The Borrower shall have paid or reimbursed the Administrative Agent and the Lenders for all costs and expenses required to be paid or reimbursed by them on or prior to such Advance date, subject to the limitations set forth in SECTION 8.03. |
Article 5
Covenants
Until the Commitments shall have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full without any pending draw, each Credit Party covenants as follows:
| SECTION 5.01 | Name or Structural Changes. |
It shall not:
| (a) | change its name, identity or legal structure or change its jurisdiction of organization to any location other than Ontario without the prior written consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed); |
| (b) | permit itself to merge, amalgamate or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, any Person; |
| (c) | change or relocate its chief executive office unless it gives the Administrative Agent written notice of such change not later than ten (10) calendar days thereafter; or |
| (d) | in the case of the General Partner, resign as general partner of the Borrower or permit any other Person to become general partner of the Borrower. |
| SECTION 5.02 | Business and Activities. |
It shall not engage in any business or activities other than those permitted under the Transaction Documents. In particular, the Credit Parties shall not have any employees or establish or contribute to any Canadian Pension Plan.
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| SECTION 5.03 | Partnership. |
| (a) | The Credit Parties shall not at any time amend or terminate or agree to amend or terminate the Partnership Agreement without the prior written consent of the Administrative Agent. |
| (b) | The Credit Parties shall not permit any new limited partners to become limited partners in the Borrower nor shall they permit any existing limited partner as at the Closing Date to exit the partnership or otherwise cease to be a party to the Partnership Agreement, in each case without the consent of the Administrative Agent. |
| SECTION 5.04 | Separateness. |
It (i) acknowledges that each of the Lenders is entering into the transactions contemplated by this Agreement in reliance upon its identity as a legal entity that is separate from the other Borrower Parties, (ii) shall take all steps specifically required by this Agreement or reasonably required by the Administrative Agent or any Lender to continue its identity as a separate legal entity and to make it apparent to third Persons that each Credit Party is an entity (or in the case of the Borrower, a partnership) with assets and liabilities distinct from those of the other Borrower Parties, and is not a division of such Persons and (iii) in furtherance of the foregoing, it shall:
| (a) | maintain its books and Records and bank accounts separate from those of any other Borrower Party; |
| (b) | at all times hold itself out to the public and all other Persons as a legal entity (or in the case of the Borrower, a partnership) separate from its member (if applicable) and any other Person; |
| (c) | file, or cause to be filed, tax returns, if any, for itself as may be required under Applicable Law, to the extent (A) not part of a consolidated group filing a consolidated return or returns or (B) not treated as a division for tax purposes of another taxpayer, and pay any taxes so required to be paid under Applicable Law; |
| (d) | except as contemplated herein or in any other Transaction Document:, pay its own liabilities only out of its own funds, not commingle the Borrower's assets with assets of any other Person; |
| (e) | not hold out its credit or assets as being available to satisfy the obligations of others and not guarantee any obligations of any other Person; |
| (f) | not pledge its assets to secure the obligations of any other Person; |
| (g) | strictly comply with all organizational formalities to maintain its separate existence; |
| (h) | maintain separate financial statements for itself; |
| (i) | not have any employees; |
| (j) | allocate fairly and reasonably with other Persons any of its overheads for shared office space (if any); |
| (k) | correct any known misunderstanding regarding its separate identity; |
| (l) | ensure it does not engage in any business or activity and does not own any assets or property except as set forth in this Agreement and the other Transaction Documents, nor incur any indebtedness or liability other than any incurred pursuant to the Transaction Documents; |
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| (m) | in the case of the Borrower, act solely in its own name (including through the General Partner, as applicable), and cause all representatives of General Partner from time to time to act at all times with respect to it consistently and in furtherance of the foregoing and in its best interests; |
| (n) | maintain its assets in a manner that facilitates their identification and segregation from those of the Affiliates of each Credit Party; and |
| (o) | not to have it acquire any securities of any other Person. |
| SECTION 5.05 | Compliance with Laws. |
It shall comply with all Applicable Laws, except to the extent that the failure to comply with such Applicable Laws does not have, or could not reasonably be expected to have, a Material Adverse Effect.
| SECTION 5.06 | Policies and Procedures. |
It shall ensure that the Borrower Parties maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower Parties and their respective directors, managers, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
| SECTION 5.07 | Authorizations. |
It shall promptly obtain, comply with the terms of and do all that is necessary and within its control to maintain in full force and effect all authorizations which are at any time required in or by all Applicable Laws in connection with the performance of its duties and obligations under the Transaction Documents to which it is a party or to ensure the legality, validity, enforceability and admissibility in evidence of the Transaction Documents, except to the extent that a failure to do so has not had or could not reasonably be expected to have a Material Adverse Effect.
| SECTION 5.08 | Records. |
It shall:
| (a) | keep and maintain all Records at such locations as are listed in SECTION 8.01 or such other location as it may notify to the Secured Parties from time to time; provided that it shall provide such Persons with written notice of such change not later than ten (10) calendar days thereafter; |
| (b) | maintain adequate back-ups of the Records; |
| (c) | establish and maintain the ability to transfer an electronic copy of its Records to the Back-up Servicer; |
| (d) | ensure that the Records to the extent that they relate to Receivables are held to the order and on trust for the Administrative Agent and comply with all reasonable instructions of any Finance Party in relation to the Records to the extent that they relate to Receivables; |
| (e) | at its sole expense (subject to the proviso below) permit the Administrative Agent, each Finance Party and/or their respective agents or representatives, upon reasonable prior notice, and subject to the facility's reasonable security procedures, to visit its office during normal office hours (each such visit, a "Review") (A) to examine or make copies of the Records that are in its possession or under its control and (B) to discuss matters relating to its financial condition or the Receivables or any Person's performance under any of the Transaction Documents, in each case, with any of its officers or employees having knowledge of such matters; provided that, so long as no Amortization Event has occurred and is continuing and that the prior Review, if any, included no material adverse findings, the Borrower shall only be responsible for the cost of two (2) Reviews in any one (1) calendar year; and |
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| (f) | keep and maintain Records adequate to permit, on and following the Effective Date, the daily identification of each Receivable and all Collections of and adjustments to each existing Receivable. |
| SECTION 5.09 | Performance and enforcement of the Sale and Servicing Agreement. |
It shall:
| (a) | perform, and will require each of the Sellers pursuant to the Sale and Servicing Agreement to perform, each of its obligations and undertakings under and pursuant to the Sale and Servicing Agreement; |
purchase Receivables under the Sale and Servicing Agreement in strict compliance with the terms thereof and will diligently enforce the rights and remedies accorded to it as the buyer under the Sale and Servicing Agreement; and
take all actions to perfect and enforce its rights and interests (and the rights and interests of the Secured Parties as its assignees) under the Sale and Servicing Agreement to which it is a party as the Administrative Agent may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in the Sale and Servicing Agreement.
| SECTION 5.10 | Ownership. |
It shall (or, to the extent required pursuant to the Sale and Servicing Agreement, will require each Seller thereto to) take all necessary action to:
| (a) | vest legal and equitable title to the Eligible Receivables irrevocably in the Borrower or the General Partner, as applicable, free and clear of any Liens other than Permitted Encumbrances; and |
establish and maintain, in favour of the Administrative Agent, for the benefit of the Secured Parties, a valid and perfected first priority Security Interest in the Collateral to the full extent contemplated herein, free and clear of any Liens other than Permitted Encumbrances (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the PPSA (or any comparable law) of all appropriate jurisdictions) to perfect the Administrative Agent's (for the benefit of the Secured Parties) Security Interest in the Collateral and such other action to perfect, protect or more fully evidence the Security Interest of the Administrative Agent for the benefit of the Secured Parties as the Administrative Agent or any Lender may reasonably request.
| SECTION 5.11 | Sales, Liens. |
Other than the ownership and Security Interests contemplated by the Transaction Documents, it shall not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Lien upon (including, without limitation, the filing of any financing statement) or with respect to, any Receivables or Collections and it shall defend the right, title and interest of the Secured Parties in, to and under any of the foregoing property, against all claims of third parties claiming through or under it.
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| SECTION 5.12 | Termination of Sale and Servicing Agreement. |
It shall not terminate the Sale and Servicing Agreement or send any termination notice to any Seller thereunder in respect thereof, without the prior written consent of each Finance Party.
| SECTION 5.13 | Indebtedness. |
It shall not incur or permit to exist any Indebtedness or liability on account of deposits except (i) the Secured Obligations (ii) other current accounts payable arising in the ordinary course of business and not overdue, unless such overdue accounts payable are disputed and being contested in good faith.
| SECTION 5.14 | Tax Status. |
It shall take such actions as needed to ensure that it will not become subject to taxation in any jurisdiction outside of Canada.
| SECTION 5.15 | Taxes. |
It shall timely (taking into account any extensions) (i) file, or cause to be filed, all tax returns (federal, state, provincial, foreign and local) required to be filed by it and (ii) pay, or cause to be paid, all Taxes, assessments and other governmental charges, if any, required to be paid by it other than Taxes, assessments and other governmental charges being contested in good faith by appropriate proceedings and as to which adequate reserves have been provided in accordance with GAAP.
| SECTION 5.16 | Use of Proceeds. |
No proceeds of any Advance shall be used directly or indirectly by it:
| (a) | to fund any operations in, finance any investments or activities in or make any payments to or for the benefit of, directly or indirectly, a Sanctioned Person or a Sanctioned Country in violation of any applicable Sanctions or in any other manner that will result in a violation by any Person of any applicable Anti-Corruption Laws or Anti-Terrorism Laws; or |
for the purpose, whether immediate, incidental or ultimate, of "purchasing or carrying" any margin stock.
| SECTION 5.17 | Anti-Terrorism Laws: |
It shall ensure that neither a Borrower Party nor, to a Borrower Party's knowledge, any of such Borrower Party's agents, shall (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person; (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224; or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order No. 13224, the USA Patriot Act or any other Anti-Terrorism Law.
| SECTION 5.18 | Further information/Assurances. |
It shall:
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| (a) | promptly furnish to the Administrative Agent and each Lender such other information, and in such form, as the Administrative Agent or the Lenders may reasonably request from time to time; and/or |
| (b) | at its own cost and expense, cause to be promptly and duly taken, executed, acknowledged and delivered all such further acts, documents, and assurances as the Administrative Agent and the Lenders may reasonably request from time to time in order to give full effect to the transactions contemplated by this Agreement. |
| SECTION 5.19 | Financial Statements; Borrowing Base and Other Information. |
The Borrower will furnish to each Finance Party:
| (a) | on each Reporting Date (commencing with the first Reporting Date to occur one month after the Closing Date), the Servicing Report; |
| (b) | within one hundred and twenty (120) days after the end of each fiscal year of the Parent Guarantor, its audited consolidated and consolidating balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year and separately breaking out the Borrower, all reported on by independent public accountants of recognized national standing (without a "going concern" or like qualification, commentary or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Parent Guarantor and its subsidiaries in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants; |
| (c) | within forty-five (45) days after the end of each fiscal quarter of the Parent Guarantor (beginning with the fiscal quarter ending March 30, 2023), its consolidated and consolidating balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal quarter and separately breaking out the Borrower; |
| (d) | as soon as available but in any event no later than thirty (30) days after the end of, and no earlier than thirty (30) days prior to the end of, each fiscal year of the Borrower, (i) a copy of the plan and forecast performance projections in relation to Line of Credit Loan Receivables (the "Projections"); and (ii) a projected consolidated and consolidating balance sheet, income statement and cashflow statement of the Borrower, for each month of the upcoming fiscal year in form reasonably satisfactory to the Administrative Agent, which such report shall be updated monthly or at the request of any Finance Party; |
| (e) | on each Weekly Settlement Date, Reporting Date, on the date of each Borrowing Request and at such other times or as may be requested by the Administrative Agent, as of the period then ended, a Borrowing Base Certificate, and supporting information in connection therewith, together with any additional reports with respect to the Borrowing Base as the Administrative Agent may reasonably request; |
| (f) | upon the request of the Administrative Agent, an Ontario Limited Partnership Report for the Borrower from the appropriate governmental officer; |
| (g) | promptly after any request therefor by the Administrative Agent or any Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that the Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that the Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan; provided that if a Borrower or any ERISA Affiliate has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, the Borrower or the applicable ERISA Affiliate shall promptly make a request for such documents and notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof; and |
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| (h) | promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower, or compliance with the terms of this Agreement, as any Finance Party may reasonably request. |
| SECTION 5.20 | Notices of Material Events. |
The Borrower will furnish to the Administrative Agent and each Lender promptly (but in any event within three (3) Business Days of becoming aware of such occurrence) written notice of the following:
| (a) | the occurrence of a Collateral Trigger Event, a Level 1 Regulatory Trigger Event, an Amortization Event or an Event of Default, together with a written statement signed by it setting forth the details of such event and any action taken or contemplated to be taken with respect thereto; |
| (b) | receipt of any notice of any material investigation by a Governmental Authority or any material litigation or proceeding commenced or threatened against any Borrower Party; |
| (c) | any Lien (other than Permitted Encumbrances) or claim made or asserted against any of the Collateral; |
| (d) | any proposal by any Seller to increase the Intercompany Debt above the amount of Intercompany Debt outstanding as of the Closing Date; |
| (e) | the occurrence of any ERISA Event; |
| (f) | any ESG Issue; and |
| (g) | any other development that results, or could reasonably be expected to result in, a Material Adverse Effect. |
Each notice delivered under this Section shall be accompanied by a statement of a senior officer or other executive officer of the General Partner (in its capacity of general partner of the Borrower) setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
| SECTION 5.21 | Existence; Conduct of Business. |
Each Credit Party will (a) do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under SECTION 5.28, and (b) carry on and conduct its business only as permitted under the Transaction Documents.
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| SECTION 5.22 | Payment of Obligations. |
Each Credit Party will pay or discharge all Indebtedness and all other material liabilities and obligations, including Taxes, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower has set aside on its books adequate reserves with respect thereto in accordance with GAAP, (c) such liabilities would not result in aggregate liabilities in excess of $250,000, and (d) there is no risk of forfeiture of any property or asset constituting Collateral as a result of the failure to so pay or discharge such Indebtedness or other liabilities or obligations.
| SECTION 5.23 | Books and Records; Inspection Rights. |
| (a) | Each Credit Party will, at the cost of the Borrower, (a) keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities, (b) permit any representatives designated by the Administrative Agent or any Lender (including employees of the Administrative Agent, any Lender or any consultants, accountants, lawyers, agents and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, to conduct at its premises field examinations of the its assets, liabilities, books and records, including examining and making extracts from its books and records and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested, and (c) permit any representatives designated by the Administrative Agent or any Lender (including employees of the Administrative Agent, any Lender or any consultants, accountants, lawyers, agents and appraisers retained by the Administrative Agent) to conduct a third-party review and reconciliation of all payment related activity, including ending balances, on not less than 100 Receivables per calendar quarter. Each Credit Party acknowledges that the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to its assets for internal use by the Administrative Agent and the Lenders. Notwithstanding the forgoing, only one of each of such field examination and inspection per calendar year per location shall be at the Credit Parties' sole expense, up to an aggregate maximum amount per annum of $130,000, and a copy of all Reports relating thereto shall be provided to the Borrower. For purposes of this SECTION 5.23, it is understood and agreed that a single field examination or inspection may be conducted at multiple relevant sites as required. |
| (b) | The Borrower shall arrange with the Sellers to make arrangements with the Seller Collections Account Bank to permit any representatives designated by the Administrative Agent (including employees of the Administrative Agent) to have the same log-in real-time electronic view rights that the Borrower holds in order to at any time to view the Seller Collections Accounts balances and payments activities. |
| SECTION 5.24 | Compliance with Laws and Material Contractual Obligations. |
Each Credit Party will ensure that each Borrower Party (i) complies with all Applicable Laws (including, without limitation, Privacy Laws) and (ii) performs in all material respects its obligations under the Transaction Documents to which it is a party, except, in each case, where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. The production by a qualified law firm of one regulatory Report per calendar year shall be at the Credit Parties' sole expense, up to an aggregate maximum amount per annum of $25,000, which Report shall be provided to the Borrower (with a copy to be provided to the Administrative Agent).
Each Credit Party will ensure that the Borrower Parties maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower Parties and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. Each Credit Party will ensure that each Borrower Party has in place a compliance management system appropriate for its respective size and complexity.
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| SECTION 5.25 | Accuracy of Information. |
Each Credit Party will ensure that any information, excluding Projections but including financial statements or other documents, furnished to the Administrative Agent or the Lenders in connection with this Agreement or any other Transaction Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder contains no material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and the furnishing of such information shall be deemed to be a representation and warranty by it on the date thereof as to the matters specified in this SECTION 5.25; provided that, with respect to projected financial information, it will only ensure that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. Each Credit Party will ensure that any Projections are made in good faith.
| SECTION 5.26 | Indebtedness. |
No Credit Party will create, incur, assume or suffer to exist any Indebtedness, except the Secured Obligations.
| SECTION 5.27 | Liens. |
No Credit Party will create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including Accounts) or rights in respect of any thereof, other than Permitted Encumbrances.
| SECTION 5.28 | Fundamental Changes. |
| (a) | No Credit Party will merge into or consolidate or amalgamate with any other Person, or permit any other Person to merge into or consolidate or amalgamate with it, or liquidate or dissolve (and distribute its assets). |
| (b) | No Credit Party will engage in any business other than as permitted under the Transaction Documents and other than businesses substantially similar to the type conducted by it on the date hereof and businesses reasonably related thereto. |
| (c) | No Credit Party will change its fiscal year from the basis in effect on the Closing Date. |
| (d) | No Credit Party will change the accounting basis upon which its financial statements are prepared. |
| SECTION 5.29 | Non-Consolidation. |
No Credit Party will take any action which could reasonably result in the Borrower (i) being consolidated with any other entity in any insolvency or bankruptcy (or equivalent) proceedings (other than the General Partner) or (ii) losing its status as a limited partnership.
| SECTION 5.30 | Disposals. |
No Credit Party will sell, transfer, lease or otherwise dispose of (or commit to sell, transfer, lease or otherwise dispose of) any asset, except in connection with a Securitization Transaction permitted by SECTION 5.40 and provided that the terms thereof have been adhered to, and otherwise with the prior written consent of the Administrative Agent.
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| SECTION 5.31 | SWAP AGREEMENTS. |
The Borrower will not enter into any Swap Agreements, except with the prior written consent of the Administrative Agent.
| SECTION 5.32 | Restricted Payments. |
Following the occurrence of an Amortization Event or Event of Default, no Credit Party will declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so. For the avoidance of doubt, to the extent of any conflict between the terms of sub-paragraph (l) of Article X of the Parent Guaranty and the terms of this Section 5.32, the terms of this Section 5.32 shall prevail.
| SECTION 5.33 | Restrictive Agreements. |
No Credit Party will, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon its ability to create, incur or permit to exist any Lien upon any of its property or assets; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by any Requirement of Law or by any Transaction Document, and (ii) the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness.
| SECTION 5.34 | Amendment of Organizational Documents. |
No Credit Party will amend, modify or waive any of its rights under its Organizational Documents.
| SECTION 5.35 | Partnership CORPORATE Covenants. |
Each of the Credit Parties:
| (a) | will not conduct any activities, except in accordance with the powers and restrictions set out in the Partnership Agreement and its obligations under the Transaction Documents, in each case, to which it is a party; |
| (b) | will not permit, consent, approve or otherwise agree to any proposed Change of Control; |
| (c) | will not consent to or approve the granting of a Lien over any shares or partnership interests issued by it, other than to the Administrative Agent to directly or indirectly secure the Secured Obligations; |
| (d) | will not issue any additional shares or partnership interests without the consent of the Administrative Agent, not to be unreasonably withheld; provided that it shall not be unreasonable for the Administrative Agent to withhold its consent to the issuance of additional shares or additional partnership interests by a Credit Party if such issuance would result in a change of Control or if such additional shares or additional partnership interests would not be subject to the Security, in the same manner and to the same extent that the existing shares or additional partnership interests of the Credit Parties are subject to the Security; and |
| (e) | will not amend the Partnership Agreement to: (i) provide that the jurisdiction of organization of the Borrower is other than Ontario, (ii) provide that the units or interest of the Borrower do not constitute "securities" under the Securities Transfer Act (Ontario), or (iii) add another general partner or remove the General Partner as the general partner of the Borrower, in each case, without the prior written consent of the Administrative Agent. |
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| SECTION 5.36 | Administrative Agent Instructions. |
| (a) | The Borrower shall not exercise any of the following rights or discretions under the Transaction Documents (other than the Credit Agreement and Fee Letter) and the Insurer Notification Letter without the consent or instructions (as applicable) of the Administrative Agent (other than in the cases of items (iv), (vii), (ix) and (x) and more generally following the occurrence of an Event of Default, acting in its Permitted Discretion), and the Administrative Agent may (other than in the cases of items (iv), (vii), (ix) and (x) and more generally following the occurrence of an Event of Default, in its Permitted Discretion) at any time instruct the Borrower to exercise any discretion under the Transaction Documents, including, but not limited to, the following: |
| (i) | upon notice by the Administrative Agent at any time following the occurrence of a Servicer Termination Event, the Borrower will exercise its rights to appoint a replacement Servicer pursuant to Section 7.02 of the Sale and Servicing Agreement; |
| (ii) | upon notice by the Administrative Agent at any time following the occurrence of an Amortization Event, the Borrower shall promptly give notice to the Sellers (a "Receivables Sale Termination Notice") that it will no longer purchase receivables under the Sale and Servicing Agreement in accordance with the terms thereof; |
| (iii) | upon notice by the Administrative Agent at any time following the occurrence of a Re-Direction Event, the Borrower shall at the request of the Administrative Agent (i) notify any Insurer of the ownership of the Purchased Assets and/or Security Interest (as defined in the General Security Agreement) and/or direct any Insurer to pay any proceeds of Insurance directly to an account specified by the Administrative Agent; |
| (iv) | upon notice by the Administrative Agent at any time following the occurrence of an Event of Default, the Borrower shall at the request of the Administrative Agent (i) notify any Insurer of the ownership of the Purchased Assets and/or Security Interest (as defined in the General Security Agreement) and/or direct any Insurer to pay any proceeds of Insurance directly to an account specified by the Administrative Agent; |
| (v) | upon notice by the Administrative Agent at any time, make a claim for indemnification on behalf of the Administrative Agent under the Sale and Servicing Agreement pursuant to its rights thereunder; |
| (vi) | upon notice by the Administrative Agent at any time, the Borrower will exercise its discretion to give notice and require the Seller to re-purchase Receivables under Section 2.02 of the Sale and Servicing Agreement; |
| (vii) | upon notice by the Administrative Agent, at any time following the occurrence of an Event of Default, notify any Obligors or any other person obligated on an account, chattel paper or instrument of the ownership of the Receivables and notify them to make payments to the party specified by the Administrative Agent (whether or not any Seller or Servicer was previously making collections on such accounts, chattel paper or instruments) or direct the Sellers or the Servicers, as applicable, to notify the Obligors, at the Borrower's expense, of the ownership of the Receivables and to notify the Obligors or any other person obligated on an account, chattel paper or instrument to make payments to the party specified by the Borrower (whether or not any Seller or Servicer was previously making collections on such accounts, chattel paper or instruments) (and the identity of the owner may be withheld in any such notification); |
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| (viii) | upon notice by the Administrative Agent, acting reasonably and within its Permitted Discretion, with due consideration for the potential impact of such action on the collectability of Receivables in particular given the nature of the Obligors, at any time following the occurrence of a Re-Direction Event, notify any Obligors or any other person obligated on an account, chattel paper or instrument of the ownership of the Receivables and notify them to make payments to the party specified by the Administrative Agent (whether or not any Seller or Servicer was previously making collections on such accounts, chattel paper or instruments) or direct the Sellers or the Servicers, as applicable, to notify the Obligors, at the Borrower's expense, of the ownership of the Receivables and to notify the Obligors or any other person obligated on an account, chattel paper or instrument to make payments to the party specified by the Borrower (whether or not any Seller or Servicer was previously making collections on such accounts, chattel paper or instruments) (and the identity of the owner may be withheld in any such notification); |
| (ix) | upon notice by the Administrative Agent at any time following the occurrence of an Event of Default, the Borrower shall promptly give notice to the Sellers of a Seller Event of Default (as defined in and) pursuant to and in accordance with the Sellers Security Agreement; |
| (x) | [RESERVED] |
| (xi) | upon notice by the Administrative Agent at any time, the Borrower will exercise any of its discretions under the Intercreditor Agreement at the direction of the Administrative Agent; |
| (xii) | upon notice by the Administrative Agent at any time following a Servicer Termination Event, the Borrower will direct the Sellers to duly complete, execute and deliver such documents and actions required to be duly completed, executed and delivered pursuant to Section 7.05 of the Sale and Servicing Agreement; and |
| (xiii) | with respect to any exercise of any power of attorney given to the Borrower pursuant to the Transaction Documents, including under Section 7.04 of the Sale and Servicing Agreement and Section 3.07 of the Sellers Security Agreement. |
| (b) | The Borrower will promptly, and in all cases in no more than one (1) Business Day from its receipt thereof, provide to the Administrative Agent: (i) any information that it becomes aware of material to the interest of the Administrative Agent or the Lenders, (ii) any formal or informal notifications it receives or (iii) a copy of any notices it receives, in each case with respect to the Transaction Documents and the Insurer Notification Letter. |
| SECTION 5.37 | records. |
Each of the Credit Parties shall:
| (a) | keep and maintain all Records in accordance with GAAP and Applicable Law at the location listed in SECTION 8.01 or such other location as it may notify to the Secured Parties from time to time; provided that it shall provide such Persons with written notice of such change not later than ten (10) calendar days thereafter; |
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| (b) | maintain adequate back-ups of the Records; |
| (c) | ensure that the Records, to the extent that they relate to Receivables, are held to the order and on trust for the Administrative Agent and comply with all reasonable instructions of any Finance Party in relation to the Records to the extent that they relate to Receivables; and |
| (d) | keep and maintain Records adequate to permit, on and following the Effective Date, the daily identification of each Receivable and all Collections of and adjustments to each existing Receivable. |
| SECTION 5.38 | Data Protection. |
Each of the Credit Parties shall:
| (a) | ensure that any collection, use, transfer or disclosure of Customer Data is in compliance with Data Requirements, and, in particular, ensure that all consents are in place that are necessary under Privacy Laws for either it or the Sellers and the Initial Servicers: (i) to share such Customer Data with the Servicers and the Verification Agent; and (ii) to use and disclose such Customer Data for the purposes intended under the Transaction Documents; and |
| (b) | promptly (and in any event within 5 Business Days) notify the Administrative Agent: |
| (i) | if it receives from any Person or has been required to give to any Person any notice regarding any offense or alleged offense under Data Requirements; |
| (ii) | if it receives notice from any of its suppliers of IT assets that are not owned or leased by it that any Customer Data or other sensitive or confidential information (in each case, in its control or possession) was stolen or improperly accessed, used, or disclosed; |
| (iii) | of the occurrence of: |
| (A) | any loss or theft of any Customer Data, or accidental or unauthorised disclosure or access to Customer Data, including any unauthorized intrusions or security breaches of any IT asset which is owned or leased by it, in which Customer Data or other sensitive of confidential information was stolen or improperly accessed, used, or disclosed; |
| (B) | any other actual, potential or suspected incident concerning or affecting Customer Data which has or could reasonably have a significant impact on the security of Customer Data; or |
| (C) | any incident concerning or affecting Customer Data which gives rise to an obligation under Privacy Laws to notify a regulator. |
| SECTION 5.39 | Seller Collections Accounts Blocked Account Agreement. |
| (a) | Each of the Credit Parties shall use best efforts to ensure that, by not later than the date that is 30 days following the date of the initial Advance hereunder, it has delivered to the Administrative Agent a fully executed blocked accounts agreement in respect of the Seller Collections Accounts in form and substance satisfactory to the Administrative Agent, acting reasonably, provided that this provision will be deemed satisfied and performed by the execution and delivery of the Intercreditor Agreement. |
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| SECTION 5.40 | Securitization transactions. |
| (a) | The Borrower or its Affiliates may from time to time execute one or more Securitization Transactions in connection with which the Borrower proposes to create a Lien and/or assign to a Seller or to another Person, as the case may be, all or part of the Purchased Assets that are part of the Collateral (a "Financing Transaction Release"). To the extent that CURO Canada Corp., LendDirect Corp. (Canada) or any of their Affiliates intends to enter into a Securitization Transaction, it may offer to the Borrower the option to sell all or a portion of the Purchased Assets with respect thereto and, in such case, shall provide the Borrower with at least forty-five (45) calendar days' or such shorter period as the parties may agree advance written notice. The Borrower may participate in or otherwise facilitate such a Securitization Transaction executed by it or its Affiliates, provided that (i) a Borrowing Base Deficiency shall not occur as a result of giving effect to the Financing Transaction Release, (ii) that, as of the date of the Financing Transaction Release, no Amortization Event or Event of Default or any event which with the giving of notice or the passage of time, or both, would become an Amortization Event or an Event of Default, has occurred, (iii) in selecting Purchased Assets to be sold and released from the Collateral in accordance with this SECTION 5.40, such selection shall be made in a manner that is not materially adverse to the interests of the Lenders, and (iv) upon the Financing Transaction Release, (1) each Lender will be paid such Lender's pro rata share of the Financing Transaction Prepayment Amount (as defined below) for the applicable Loan, and (2) each other Person to whom monies are owed on the applicable Weekly Settlement Date under SECTION 2.03 will be paid all amounts owing to such Person from the amounts deposited in the Transaction Account, all in accordance with SECTION 2.03 (collectively, the "Financing Transaction Conditions"), and subject to the procedures and conditions, as follows: |
| (i) | at least twenty (20) days prior to the related Financing Transaction Release: |
| (A) | the Borrower will deliver a written notice to the Administrative Agent (the "Financing Transaction Notice"), of the intention of the Borrower to participate in or otherwise facilitate a Securitization Transaction to be entered into by it or its Affiliates, thereby (A) notifying the Administrative Agent that it will be paying the Financing Transaction Prepayment Amount in accordance with the terms hereof, which notice will state (I) the date fixed for pre-payment and the Financing Assignment Designation Cut-Off Date, and (II) the principal amount of the Loans to be repaid in connection with the Financing Transaction Release, together with any unpaid interest accrued thereon to (but excluding) the date fixed for pre-payment and any applicable premium in respect thereof (the "Financing Transaction Prepayment Amount"), and (B) certifying that, after giving effect to the Financing Transaction Release, the Financing Transaction Conditions will be satisfied; |
| (B) | concurrently with the delivery of the notice referred to in SECTION 5.40(a)(i)(A), the Servicer will deliver to the Administrative Agent (A) a schedule of the Purchased Assets to be released from the Collateral in connection with a Financing Transaction Release (the "Financing Transaction Release List"), and (B) an updated schedule of Loans reflecting the Purchased Assets that will continue to be held by the Administrative Agent as Collateral following the proposed release; |
| (ii) | the Administrative Agent shall have accepted, in writing, the Financing Transaction Notice (provided such acceptance shall not be unreasonably withheld or delayed) and be satisfied with (acting reasonably) the Financing Transaction Prepayment Amount and the Financing Transaction Release List; the Administrative Agent agrees that it shall respond to any Financing Transaction Notice within ten (10) days of receipt; |
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| (iii) | on or before the related Weekly Settlement Date, the Borrower will deposit into the Transaction Account an amount equal to the Financing Transaction Prepayment Amount for all or a portion, as the case may be, of the Loans to be repaid, together with such other amounts as may be required to be paid on the related Weekly Settlement Date, in accordance with SECTION 2.03; and |
| (iv) | upon the deposit to the Transaction Account in accordance with SECTION 5.40(a)(iii), the Liens under the General Security Agreement affecting the portion of the Collateral corresponding to the Purchased Assets identified in the Financing Transaction Release List shall be considered to be automatically released by the Administrative Agent and the Administrative Agent will promptly deliver to the Borrower and the Servicers such documents and certificates in respect of the release as they may reasonably request. |
| (b) | Upon the deposit to the Transaction Account in accordance with SECTION 5.40(a)(iv) in connection with any Financing Transaction Release, and subject to the other terms and conditions set forth herein, the Purchased Assets included in the related Financing Transaction Release List and all Collections paid and payable with respect to such Purchased Assets on and after the applicable Financing Assignment Designation Cut-Off Date shall be assigned by the Borrower to the applicable Seller or other Person designated by the Borrower, and if the Borrower receives any Collections on account of such Purchased Assets after the applicable Financing Assignment Designation Cut-Off Date, such Collections shall be paid over to the applicable Seller or such other Person who has acquired such Purchased Assets. For greater certainty, the purchase price paid by the applicable Seller or such other Person to the Borrower for such Purchased Assets shall be deposited to the Transaction Account for application as the Financing Transaction Prepayment Amount in accordance with this Section 5.40 and Section 2.03. The Borrower may execute and deliver to the applicable Seller or such other Person who has acquired such Purchased Assets any documents that may reasonably be required to give further effect this Section. |
| SECTION 5.41 | General Partner Board Composition. |
| (a) | Each Credit Party shall take reasonable steps to ensure that the board of directors of CURO Canada Receivables II GP Inc. at all times includes at least one independent director, and if at any time no such independent director is a member of the board of directors of CURO Canada Receivables II GP Inc., to promptly facilitate election of an independent director. |
| SECTION 5.42 | PARENT GUARANTOR-RELATED COVENANTS |
| (a) | Adjusted Pre-Tax Income of Parent Guarantor. The Adjusted Pre-Tax Income of Parent Guarantor for each four Fiscal Quarter period, beginning with such period ending on March 31, 2024, shall be at least equal to the Minimum Adjusted Pre-Tax Income. |
| (b) | Minimum Liquidity. As of the last day of any monthly period, the Unrestricted Cash or Cash Equivalents owned by the Parent Guarantor and its Subsidiaries on a consolidated basis shall, beginning May 31, 2023, be equal to or greater than [* * * * *]. |
| (c) | Maximum Operating Expense to Asset Ratio. As of the last day of each Fiscal Quarter, beginning on March 31, 2024, the ratio of (y) Operating Expenses for the four Fiscal Quarter period ending on the last day of such Fiscal Quarter to (y) the average amount of gross loans receivable for the five Fiscal Quarter period ending on the last day of such Fiscal Quarter (as shown on the balance sheet of the Parent Guarantor and its Subsidiaries prepared in accordance with GAAP) to be calculated as the average of the gross loans receivable balance as of last day of each Fiscal Quarter in the five Fiscal Quarter period ending on the last day of such Fiscal Quarter is not greater than the Maximum Operating Expense to Asset Ratio for such Fiscal Quarter. |
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| (d) | For purposes of this SECTION 5.42, “Adjusted Pre-Tax Income”, “Fiscal Quarter”, “Minimum Adjusted Pre-Tax Income”, “Operating Expenses” and “Maximum Operating Expense to Asset Ratio” (and terms constituting components of such terms) shall have the respective meanings assigned to such terms in the Term Loan Agreement as in effect on May 12, 2023, without giving effect to any amendment or modification made thereto after such date unless such amendment or modification was made with the written consent of the Administrative Agent. |
| SECTION 5.43 | Financial Covenant Amendment. |
If any financial covenant or any term constituting a component of a financial covenant, in each case, as determined by the Administrative Agent in its sole discretion, contained in the Term Loan Agreement or in that certain Indenture, by and among Parent Guarantor, as issuer, the guarantors party thereto, and U.S. Bank Trust Company, National Association, as trustee and as collateral agent, is amended in a manner that, in the reasonable opinion of the Administrative Agent, would cause any such financial covenant to be more restrictive on the Parent Guarantor or any Affiliate thereof than the financial covenants in SECTION 5.42 hereunder, then the Borrower shall, within thirty (30) days of such amendment, cause this Agreement to be amended to make the financial covenants in SECTION 5.42 hereunder no less restrictive (in the reasonable opinion of the Administrative Agent) than the financial covenants thereunder.
| SECTION 5.44 | Back-up Servicing and Verification Agency Agreement. |
| (a) | The Credit Parties shall deliver or cause to be delivered, as applicable, the Back-up Servicing and Verification Agency Agreement, in form and substance satisfactory to the Administrative Agent, acting reasonably, within 30 days of the Closing Date. |
| (b) | Promptly upon delivery of the Back-up Servicing and Verification Agency Agreement, and in any event within 45 days of the Closing Date, the Credit Parties shall cause the Verification Agent to undertake, to the satisfaction of the Administrative Agent, verification of seventy-five (75) Receivables from the Loan Level Data Tape for the Receivables proposed by the Borrower for initial funding by the Lender. |
Article 6
Events of Default, Amortization Events and Re-Direction Events
| SECTION 6.01 | EVENTS OF DEFAULT. |
If any of the following events ("Events of Default") shall occur:
| (a) | the Borrower shall fail to pay any principal due under any Loan when and as the same shall become due and payable whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; |
| (b) | the Borrower shall fail to make any payment of interest, fees or other payment (other than a payment referred to in Section 6.01(a)) when and as the same shall become due and payable, including the amount of any Borrowing Base Deficiency or in respect of any other Secured Obligation (other than a payment referred to in Section 6.01(a)), within three (3) Business Days of becoming due, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; |
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| (c) | any representation or warranty made or deemed made by or on behalf of the Borrower in, or in connection with, this Agreement or any other Transaction Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Transaction Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, shall prove to have been materially incorrect when made or deemed made and, if such misrepresentation is capable of being cured, is not cured within ten (10) Business Days after the earlier of (i) the date on which a CURO Entity has knowledge thereof or reasonably should have known; and (ii) the date on which written notice has been given by the Administrative Agent to the Borrower specifying the incorrectness and requiring that the circumstances giving rise thereto be eliminated or otherwise rectified; |
| (d) | the Borrower fails to observe or perform any of the financial covenants set forth in Article 5 hereto; |
| (e) | the Borrower fails to observe or perform any covenant, condition or agreement contained in the Transaction Documents (other than payments referred to in Sections 6.01(a) and (b) and the covenants referred to in Section 6.01(d)) and such failure, if capable of being remedied, remains unremedied for a period of ten (10) Business Days after the earlier of (i) the date on which a CURO Entity has knowledge thereof or reasonably should have known; and (ii) the date on which written notice of such failure has been given by the Administrative Agent to the Borrower requiring such failure to be remedied; |
| (f) | an Insolvency Event with respect to any Borrower Party or the Parent Guarantor; |
| (g) | Parent Guarantor or any CURO Entity shall have one or more final nonappealable judgments entered against it by a court of competent jurisdiction, enter into one or more settlements or have a penalty or fine assessed against it by any Governmental Authority, in excess of, in the aggregate, $1,000,000 and, in the case of the Borrower, $50,000, which, in any of the foregoing cases, shall not have been bonded pending appeal, satisfied, stayed, vacated or discharged of record within thirty (30) days of being rendered; |
| (h) | a Master Insurance Policy ceases to be in effect and is not replaced by one or more replacement Master Insurance Policies (including an existing Master Insurance Policy that is extended to cover the Receivables originated by such Seller that were subject to the Master Insurance Contract that is terminated, cancelled or surrendered) on substantially the same terms (including the corresponding Master Insurance Marketing Agreement that governs the relationship of the relevant Seller and relevant Insurer with respect to the Master Insurance Policy) and which provide(s) substantially the same risk coverage of the Obligors and Receivables and substantially the same coverage of the proportion of the Purchased Receivables in respect of which Insurance is place, as is provided by the Master Insurance Policies in effect on the Closing Date, within (i) if such Master Insurance Policy ceases to be in effect following receipt of notice of its termination from an Insurer or due to notification by a Seller to an Insurer that the Seller is terminating a Master Insurance Policy (in each case in accordance with the terms of the relevant Master Insurance Policy), a period of time equal to the contractual termination period specified in such Master Insurance Policy, and (ii) if a Master Insurance Policy is otherwise terminated, within 180 days of the relevant Master Insurance Policy ceasing to be in effect; |
| (i) | any representation or warranty made or deemed made by or on behalf of the Parent Guarantor under the Parent Guaranty or any amendment or modification hereof or thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with the Parent Guaranty or any amendment or modification thereof or waiver thereunder, shall prove to have been materially incorrect when made or deemed made and, if such misrepresentation is capable of being cured, is not cured within ten (10) Business Days after the earlier of (i) the date on which the Parent Guarantor has knowledge thereof or reasonably should have known; and (ii) the date on which written notice from the Administrative Agent to the Parent Guarantor specifying the incorrectness and requiring that the circumstances giving rise thereto be eliminated or otherwise rectified; |
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| (j) | the Parent Guarantor fails to observe or perform any covenant, condition or agreement contained in the Parent Guaranty and such failure, if capable of being remedied, remains unremedied for a period of ten (10) Business Days after the earlier of (i) the date on which the Parent Guarantor has knowledge thereof or reasonably should have known; and (ii) the date on which written notice of such failure has been given by the Administrative Agent to the Parent Guarantor requiring such failure to be remedied; |
| (k) | (i) any CURO Entity shall be required to register as, an "investment company" within the meaning of the Investment Company Act or (ii) the Borrower becomes a "covered fund" under the Volcker Rule; |
| (l) | a Seller shall for any reason cease to have the legal capacity to transfer, or otherwise be incapable of transferring the Eligible Receivables to the Borrower under the Sale and Servicing Agreement; |
| (m) | as of any date of determination, a Level 3 Collateral Trigger shall occur; |
| (n) | a Servicer Termination Event shall occur; |
| (o) | a Level 3 Regulatory Trigger Event shall occur; |
| (p) | an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; |
| (q) | a Change of Control shall occur; |
| (r) | the Partnership Agreement or the Organizational Documents of the General Partner shall be amended in a manner that changes the objects and powers of either of the Credit Parties or otherwise allows any Credit Party to carry on any business or activity in breach of SECTION 5.28(b), that has or could reasonably be expected to have a Material Adverse Effect, or any successor limited partner of the Borrower or successor General Partner shall fail to execute and deliver, concurrently upon succeeding as or becoming a limited partner of the Borrower or the General Partner, as the case may be, such certificates, agreements, other documents and opinions of its counsel as the Administrative Agent shall reasonably request in order that such succeeding limited partner or General Partner, as the case may be, be bound by the applicable Transaction Documents and to preserve and protect the rights, remedies and interests of the Lenders under the Transaction Documents; |
| (s) | except as permitted by the terms of the General Security Agreement or the Sellers Security Agreement, (i) the General Security Agreement shall or the Sellers Security Agreement for any reason fail to create a valid security interest in any Collateral purported to be covered thereby, or (ii) any Lien securing any Secured Obligation or Sellers Secured Obligation shall cease to be a perfected, first priority Lien; |
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| (t) | the General Security Agreement or the Sellers Security Agreement shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the General Security Agreement of the Sellers Security Agreement; |
| (u) | the Back-up Servicing and Verification Agency Agreement shall, at any time after its delivery, cease to be in full force and effect and a replacement Back-up Servicing and Verification Agency Agreement is not entered into within 90 days after the date of such agreement ceasing to be in full force and effect; |
| (v) | any subordination or postponement agreement in favour of the Administrative Agent shall be invalidated or otherwise cease to constitute the legal, valid and binding obligations of the Borrower and the subordinated creditor party thereto, enforceable in accordance with its terms or the Borrower and the subordinated creditor party thereto, deny or contest the validity or enforceability of such subordination or postponement agreement; |
| (w) | any material provision of any Transaction Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or the Borrower shall challenge the enforceability of any Transaction Document or shall assert in writing, or engage in any action or inaction that evidences its assertion, that any provision of any of the Transaction Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms); or |
| (x) | the Parent Guarantor or any Subsidiary (as defined in the Term Loan Agreement) thereof shall default under any mortgage, indenture or instrument which evidences any indebtedness, obligations or liabilities for money borrowed by the Parent Guarantor or any of its Subsidiaries (as defined in the Term Loan Agreement) (or the payment of which is guaranteed by the Parent Guarantor or any of its Subsidiaries (as defined in the Term Loan Agreement)), whether any such indebtedness, obligations or liabilities or guarantee now exists or is created after the date of this Agreement, and, in each case, the principal amount of any such indebtedness, obligations or liabilities, together with the principal amount of any other such indebtedness, obligations or liabilities under which the Parent Guarantor or such Subsidiary (as defined in the Term Loan Agreement) has defaulted, exceeds, in the aggregate, $20,000,000 (or its foreign currency equivalent), |
then, (A) in every such event, and at any time thereafter during the continuance of such event, the Availability Period shall be deemed to have terminated, and (B) in every such event (other than an event with respect to the Borrower described in clause (f) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, whereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole, whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in the case of any event with respect to the Borrower described in clause (f) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, increase the rate of interest applicable to the Loans and other Secured Obligations as set forth in this Agreement and exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the PPSA.
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Upon the occurrence of an Event of Default, the Administrative Agent may in its discretion:
| (i) | notify the Obligors, at the Borrower's expense, of the ownership or Security Interests (as defined in the General Security Agreement) of the Administrative Agent (on behalf of the Lenders) under the General Security Agreement and notify the Obligors or any other person obligated on an account, chattel paper or instrument to make payments to the Administrative Agent (whether or not the Borrower was previously making collections on such accounts, chattel paper or instruments) (and the identity of the Administrative Agent or such Lender may be withheld in any such notification); |
| (ii) | notify any Insurer of the ownership of and/or Security Interests (as defined in the General Security Agreement) in the Purchased Assets and/or direct any Insurer to pay any proceeds of the Insurance directly to an account specified by the Administrative Agent; |
| (iii) | deliver an Activation Notice (as defined in and) pursuant to and in accordance with the Transaction Account Blocked Account Agreement or any other Control Agreement by way of notification to the Transaction Account Bank or other applicable institution and direction to the Transaction Account Bank or other applicable institution to pay any funds that stand to the credit of the Transaction Account or such other account subject to any other Control Agreement directly to an account specified by the Administrative Agent; or |
| (iv) | cause or direct servicing to be transferred to the Back-up Servicer (or its successor pursuant to the Back-up Servicing and Verification Agency Agreement) or another third-party servicer. |
The rights set out in this SECTION 6.01 shall be without limitation, and shall be in addition to all other rights and remedies of the Administrative Agent otherwise available under any other provision of the Transaction Documents, by operation of law, at equity or otherwise, all of which are hereby expressly preserved, including, without limitation, all rights and remedies provided under the PPSA, all of which rights shall be cumulative.
| SECTION 6.02 | AMORTIZATION EVENTS. |
| (a) | Upon the occurrence of an Amortization Event, the Administrative Agent may in its discretion, upon notice to the Borrower, declare that the amortization date (the "Amortization Date") shall have occurred, whereupon the Revolving Period shall forthwith terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder shall be paid in accordance with SECTION 2.03; provided however, that upon the occurrence of an Amortization Event (i) described in clauses (b) or (d) of such definition, or (ii) described in clause (c) of such definition, in connection with an Event of Default of the type described in clause (d) of the definition of "Event of Default", the Amortization Date shall automatically occur. |
| SECTION 6.03 | Re-Direction Events. |
| (a) | Subject to SECTION 5.36, upon the occurrence of a Re-Direction Event, the Administrative Agent may in its discretion: |
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| (b) | direct the Borrower or the Servicers, as applicable, to notify the Obligors, at the Borrower's expense, of the ownership or Security Interests (as defined in the General Security Agreement) of the Administrative Agent (on behalf of the Lenders) under the General Security Agreement and to notify the Obligors or any other person obligated on an account, chattel paper or instrument to make payments to the Administrative Agent (whether or not the Borrower was previously making collections on such accounts, chattel paper or instruments), and if such notification is not made within five (5) calendar days after the Administrative Agent has so directed the Borrower or the Servicers, as applicable, the Administrative Agent may make such notification (and the Borrower or the Servicers (as applicable) shall, at the Administrative Agent's or any Lender's request, withhold the identity of the Administrative Agent or such Lender in any such notification); |
| (c) | notify any Insurer of the ownership of and/or Security Interests (as defined in the General Security Agreement) in the Purchased Assets and/or direct any Insurer to pay any proceeds of the Insurance directly to an account specified by the Administrative Agent; and |
| (d) | deliver an Activation Notice (as defined in the Transaction Account Blocked Account Agreement) pursuant to and in accordance with the Transaction Account Blocked Account Agreement or any other Control Agreement by way of notification to the Transaction Account Bank or other applicable institution and direction to the Transaction Account Bank or other applicable institution to pay any funds that stand to the credit of the Transaction Account or such other account subject to any other Control Agreement directly to an account specified by the Administrative Agent, in accordance with the terms of the Transaction Account Blocked Account Agreement or any other Control Agreement. |
Article 7
The Administrative Agent
| SECTION 7.01 | Appointment. |
Each of the Lenders, on behalf of itself and any of its Affiliates that are Secured Parties hereby irrevocably appoints the Administrative Agent as its agent to hold the Collateral as security for and on behalf of the Secured Parties and authorizes the Administrative Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. In addition, to the extent required under the laws of any jurisdiction other than Canada, each of the Lenders hereby grants to the Administrative Agent any required powers of attorney to execute the General Security Agreement governed by the laws of such jurisdiction on such Lender's behalf. The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders, and the Borrower shall not have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term "agent" as used herein or in any other Loan Documents (or any similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Applicable Law. Instead, such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
| SECTION 7.02 | Rights as a Lender. |
The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Affiliate thereof as if it were not the Administrative Agent hereunder.
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| SECTION 7.03 | Duties and Obligations. |
The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in SECTION 8.02), and, (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower that is communicated to or obtained by the bank serving as the Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in SECTION 8.02) or in the absence of its own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction. The Administrative Agent shall be deemed not to have knowledge of any Event of Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral, or (v) the satisfaction of any condition set forth in Article 4 or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
| SECTION 7.04 | Reliance. |
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
| SECTION 7.05 | Actions through Sub-Agents. |
The Administrative Agent may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as the Administrative Agent.
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| SECTION 7.06 | Resignation. |
Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, and the Borrower. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by its successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor, unless otherwise agreed by the Borrower and such successor. Notwithstanding the foregoing, in the event no successor Administrative Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its intent to resign, the retiring Administrative Agent may give notice of the effectiveness of its resignation to the Lenders and the Borrower, whereupon, on the date of effectiveness of such resignation stated in such notice, (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents, provided that, solely for purposes of maintaining any security interest granted to the Administrative Agent under the General Security Agreement for the benefit of the Secured Parties, the retiring Administrative Agent shall continue to be vested with such security interest as collateral agent for the benefit of the Secured Parties and, in the case of any Collateral in the possession of the Administrative Agent, shall continue to hold such Collateral, in each case until such time as a successor Administrative Agent is appointed and accepts such appointment in accordance with this paragraph (it being understood and agreed that the retiring Administrative Agent shall have no duly or obligation to take any further action under the General Security Agreement, including any action required to maintain the perfection of any such security interest), and (b) the Required Lenders shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, provided that (i) all payments required to be made hereunder or under any other Loan Document to the Administrative Agent for the account of any Person other than the Administrative Agent shall be made directly to such Person and (ii) all notices and other communications required or contemplated to be given or made to the Administrative Agent shall also directly be given or made to each Lender. Following the effectiveness of the Administrative Agent's resignation from its capacity as such, the provisions of this Article, SECTION 2.13(d) and SECTION 8.03, as well as any exculpatory, reimbursement and indemnification provisions set forth in any other Loan Document, shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent and in respect of the matters referred to in the proviso under clause (a) above. All services rendered in Canada under this Agreement or any other Loan Document to be performed by the Administrative Agent will be performed by a Canadian resident for purposes of the ITA or an authorized foreign bank for purposes of the Bank Act (Canada).
| SECTION 7.07 | Non-Reliance. |
| (a) | Each Lender acknowledges and agrees that the extensions of credit made hereunder are commercial loans and letters of credit and not investments in a business enterprise or securities. Each Lender further represents that it is engaged in making, acquiring or holding commercial loans in the ordinary course of its business and has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder. Each Lender shall, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information (which may contain material, non-public information within the meaning of the United States securities laws concerning the Borrower and their Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document, any related agreement or any document furnished hereunder or thereunder and in deciding whether or to the extent to which it will continue as a Lender or assign or otherwise transfer its rights, interests and obligations hereunder. |
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| (b) | Each Lender hereby agrees that (i) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (ii) the Administrative Agent (A) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (B) shall not be liable for any information contained in any Report; (iii) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Borrower and will rely significantly upon the Borrower's books and records, as well as on representations of the Borrower's personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (iv) it will keep all Reports confidential and strictly for its internal use, not share the Report with the Borrower or any other Person except as otherwise permitted pursuant to this Agreement; and without limiting the generality of any other indemnification provision contained in this Agreement, (A) it will hold the Administrative Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any extension of credit that the indemnifying Lender has made or may make to the Borrower, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, a Loan or Loans; and (B) it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable legal fees) incurred by the Administrative Agent or any such other Person as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender. |
| SECTION 7.08 | Not Partners or Co-Venturers; Administrative Agent as Representative of the Secured Parties. |
| (a) | The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender. The Administrative Agent shall have the exclusive right on behalf of the Lenders to enforce the payment of the principal of and interest on any Loan after the date such principal or interest has become due and payable pursuant to the terms of this Agreement. |
| (b) | Each Lender authorizes the Administrative Agent to enter into the General Security Agreement and to take all action contemplated by such document. Each Lender agrees that no Secured Party (other than the Administrative Agent) shall have the right individually to seek to realize upon the security granted by the General Security Agreement, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent for the benefit of the Secured Parties upon the terms of the General Security Agreement. In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Administrative Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favour of the Administrative Agent on behalf of the Secured Parties. For the avoidance of doubt, each Lender appoints the Administrative Agent as its agent for the purpose of perfecting Liens in assets which, in accordance with the PPSA, the Securities Transfer Act (Ontario) or any other Applicable Law can be perfected only by possession or control. |
| SECTION 7.09 | NO SERVICES IN CANADA. |
The Administrative Agent, its sub-agents, and their Related Parties and any successor thereto will not render any services under this Agreement or any other Loan Document in Canada.
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Article 8
Miscellaneous
| SECTION 8.01 | Notices. |
| (a) | Except in the case of notices and other communications expressly permitted to be given by telephone or Electronic Systems (and subject in each case to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by (x) hand or overnight courier service, mailed by certified or registered mail or (y) e-mail, as follows: |
| (i) | if to the Borrower, to CURO Canada Receivables II Limited Partnership at: |
[* * * * *]
| (ii) | if to any Lender, to such Lender at: |
[* * * * *]
| (iii) | if to the Administrative Agent, to Midtown Madison Management LLC at: |
[* * * * *]
All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received, (ii) sent by e-mail shall be deemed to have been given when delivered or (iii) delivered through Electronic Systems to the extent provided in paragraph (b) below shall be effective as provided in such paragraph.
| (b) | Notices and other communications to the Lenders hereunder may be delivered or furnished by Electronic Systems pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. Each of the Administrative Agent and the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by Electronic Systems pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise proscribes, all such notices and other communications posted to an Internet or intranet website shall be deemed received upon notification that such notice or communication is available and identifying the website address therefor; provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day of the recipient. |
| (c) | Any party hereto may change its address or e-mail address for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. |
| (d) | Electronic Systems. |
| (i) | The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make Communications (as defined below) available to the Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak, ClearPar or a substantially similar Electronic System. |
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| (ii) | Any Electronic System used by the Administrative Agent is provided "as is" and "as available." The Administrative Agent does not warrant the adequacy of such Electronic Systems and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by the Administrative Agent in connection with the Communications or any Electronic System. In no event shall the Administrative Agent or any of its Related Parties (collectively, the "Agent Parties") have any liability to the Borrower, any Lender or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrower's or the Administrative Agent's transmission of communications through an Electronic System. "Communications" means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of the Borrower pursuant to any Transaction Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender by means of electronic communications pursuant to this Section, including through an Electronic System. |
| SECTION 8.02 | Waivers; Amendments. |
| (a) | No amendment or waiver of any provision of this Agreement will be effective unless it is in writing signed by the parties hereto. |
| (b) | No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or under any other Transaction Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (c) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Event of Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time. |
| (c) | Except as provided in the first sentence of SECTION 2.07(b) (with respect to any commitment increase), neither this Agreement nor any other Transaction Document (other than any fee letter) nor any provision hereof or thereof may be waived, amended or modified except in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Borrower, with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender), (ii) reduce or forgive the principal amount of any Loan or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) affected thereby, (iii) postpone any scheduled date of payment of the principal amount of any Loan, or any date for the payment of any interest, fees or other Secured Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) affected thereby, (iv) change SECTION 2.14(b) or SECTION 2.14(d) in a manner that would alter the manner in which payments are shared, without the written consent of each Lender (other than any Defaulting Lender), (v) increase the advance rates set forth in the definition of Borrowing Base or add new categories of eligible assets, without the written consent of the Supermajority Lender (other than any Defaulting Lender), (vi) change any of the provisions of this Section or the definition of "Required Lenders" or any other provision of any Loan Document specifying the number or percentage of Lender required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (other than any Defaulting Lender) directly affected thereby, (vii) change SECTION 2.16, without the consent of each Lender (other than any Defaulting Lender) or (viii) except as provided in clause (d) of this Section or in the General Security Agreement, release or subordinate the Administrative Agent's Lien on all or substantially all of the Collateral, without the written consent of each Lender (other than any Defaulting Lender); provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent hereunder without the prior written consent of the Administrative Agent (it being understood that any amendment to SECTION 2.16 shall require the consent of the Administrative Agent). The Administrative Agent may also amend the Commitment Schedule to reflect assignments entered into pursuant to SECTION 8.04. |
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| (d) | Notwithstanding the foregoing, the Administrative Agent may, with consent of the Borrower only, amend, modify or supplement this Agreement and the other Loan Documents to cure any ambiguity, omission, defect or inconsistency, so long as such amendment, modification or supplement does not adversely affect the rights of any Lender, without obtaining the consent of any other party to this Agreement. |
| (e) | The Lenders hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Borrower on any Collateral (i) upon the termination of all of the Commitments, payment and satisfaction in full in cash of all Secured Obligations (other than Unliquidated Obligations), and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold or disposed of if the Borrower certifies to the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry) or (iii) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article 6. Except as provided in the preceding sentence, the Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; provided that, the Administrative Agent may in its discretion, release its Liens on Collateral valued in the aggregate not in excess of $1,000,000 during any calendar year without the prior written authorization of the Required Lenders (it being agreed that the Administrative Agent may rely conclusively on one or more certificates of the Borrower as to the value of any Collateral to be so released, without further inquiry). Any such release shall not in any manner discharge, affect, or impair the Secured Obligations or any Liens (other than those expressly being released) upon (or obligations of the Borrower in respect of) all interests retained by the Borrower, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral. Any execution and delivery by the Administrative Agent of documents in connection with any such release shall be without recourse to or warranty by the Administrative Agent. |
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| SECTION 8.03 | Expenses; Indemnity; Damage Waiver. |
| (a) | The Borrower shall pay all (i) reasonable out of pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of any outside general counsel, plus, if applicable, one local counsel in any relevant jurisdiction and one counsel with respect to any specialized matters for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through an Electronic System) of the credit facilities provided for herein, the preparation and administration of the Transaction Documents and any amendments, modifications or waivers of the provisions of the Transaction Documents (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) out-of-pocket expenses incurred by the Administrative Agent or any Lender, including the fees, charges and disbursements of any outside general counsel, plus, if applicable, one local counsel in any relevant jurisdiction and one counsel with respect to any specialized matters for each of the Administrative Agent or any Lender (to the extent that such Lender or similarly affected group of Lender has an actual or perceived conflict of interest with the Administrative Agent or another Lender or Lender), in connection with the enforcement, collection or protection of its rights in connection with the Transaction Documents, including its rights under this Section, or in connection with the Loans made, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans. Expenses being reimbursed by the Borrower under this Section include, without limiting the generality of the foregoing, fees, costs and expenses incurred in connection with: |
| (i) | appraisals and insurance reviews; |
| (ii) | field examinations and the preparation of Reports based on the fees charged by a third party retained by the Administrative Agent or the internally allocated fees for each Person employed by the Administrative Agent with respect to each field examination, subject to the maximum amount specified in SECTION 5.23(a); |
| (iii) | background checks regarding senior management and/or key investors, as deemed necessary or appropriate in the sole discretion of the Administrative Agent; |
| (iv) | Taxes, fees and other charges for (A) lien and title searches and title insurance and (B) filing financing statements and continuations, and other actions to perfect, protect, and continue the Administrative Agent's Liens; |
| (v) | sums paid or incurred to take any action required of the Borrower under the Transaction Documents that the Borrower fails to pay or take; and |
| (vi) | forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the accounts and lock boxes, and costs and expenses of preserving and protecting the Collateral. |
All of the foregoing fees, costs and expenses may be charged to the Borrower as Loans.
| (b) | The Borrower shall indemnify the Administrative Agent and each Lender, and each Affiliate of any of the foregoing Persons (each such Person being called an "Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties, incremental taxes, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of: |
| (i) | the execution or delivery of the Transaction Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby; |
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| (ii) | any representation or warranty made by any Credit Party under this Agreement, or any other Transaction Document to which is it a party, which shall have been false or incorrect when made or deemed made; |
| (iii) | any Loan or the use of the proceeds therefrom; |
| (iv) | the failure of the Borrower to deliver to the Administrative Agent the required receipts or other required documentary evidence with respect to a payment made by the Borrower for Taxes pursuant to SECTION 2.12; |
| (v) | any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not such claim, litigation, investigation or proceeding is brought by any lender or credit provider arising out of any actual or potential credit agreement or facility (or similar credit arrangement) between any lender or credit provider (other than any Indemnitee) and CURO Group Holdings Corp. and/or any of its Subsidiaries; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence, fraud or willful misconduct of such Indemnitee (but, for the avoidance of doubt, pending any such final and non-appealable judgment, the Borrower will pay each applicable Indemnitee any such losses, claims, damages, penalties, liabilities or related expenses, including by advancing all reasonable legal fees; provided, that any such advanced amounts shall be promptly repaid to the Borrower upon issuance of any such final and non-appealable judgment that the claimed losses, claims, damages, penalties, liabilities or related expenses have resulted from the gross negligence, fraud or willful misconduct of such Indemnitee); |
| (vi) | to the extent not governed by clause (v) above, any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not such claim, litigation, investigation or proceeding is brought by the Borrower or their respective equity holders, Affiliates, creditors or any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence, fraud or willful misconduct of such Indemnitee; |
| (vii) | any representation or warranty made or deemed to be made by the Sellers or the Servicers (or any of its officers), in or in connection with any Transaction Document, which was incorrect in any material respect when made or deemed made or delivered; |
| (viii) | the failure by the Sellers or the Servicers to perform or observe any of its covenants, duties or obligations under any of the Transaction Documents; |
| (ix) | the failure by any of the Sellers or the Servicers to comply with any applicable law, rule, regulation, order, judgment, injunction, award or decree with respect to any part of the Purchased Assets, or the non-conformity of any Purchased Assets with any applicable law, rule, regulation, order, injunction, award or decree; |
| (x) | any commingling of Collections with other funds of the Sellers or the Servicers or any other Person; |
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| (xi) | any Canadian, foreign, federal, provincial, state, municipal, local or other tax of any kind or nature whatsoever, including any capital, income, sales, excise, business or property tax, any customs duty, and any penalty or interest in respect of any thereof, which may be imposed on the Borrower on account of any payment made under Section 9.04 of the Sale and Servicing Agreement; and |
| (xii) | any disclosure of personal information (within the meaning of applicable Canadian privacy legislation) of any individual by any Seller or Servicer to any Person (such personal information provided by the Sellers or the Servicers to any Person, if any, being "Personal Information"), that is not in compliance with PIPEDA or any other applicable Canadian privacy legislation. |
| (xiii) | any other action or occurrence relating to or arising out of items (i) through (xi) above. |
This SECTION 8.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.
| (c) | To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent (or any sub-agent or Affiliate thereof) under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent (or any Affiliate thereof), as the case may be, such Lender's Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount (it being understood that the Borrower's failure to pay any such amount shall not relieve the Borrower of any default in the payment thereof); provided that the unreimbursed expense or indemnified loss, claim, damage, penalty, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent in its capacity as such. |
| (d) | To the extent permitted by Applicable Law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee (i) for any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet) or (ii) on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Transaction Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or the use of the proceeds thereof; provided that, nothing in this paragraph (d) shall relieve the Borrower of any obligation it may have to indemnify an Indemnitee against special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party. |
| (e) | Each Lender, in proportion to its pro rata share, severally agrees to indemnify the Administrative Agent and each Affiliate of the Administrative Agent (each such Person being called an "Agent Indemnitee"), to the extent that such Agent Indemnitee shall not have been reimbursed by the Borrower, against, and hold each Agent Indemnitee harmless from, any and all losses, claims, damages, penalties, incremental taxes, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Agent Indemnitee, incurred by or asserted against any Agent Indemnitee arising out of, in connection with, or as a result of the execution or delivery of the Transaction Documents, including the Transaction Account Blocked Account Agreement, or any other Control Agreement entered in by the Administrative Agent pursuant to and in connection with this Agreement or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby. |
| (f) | All amounts due under this Section shall be payable promptly after written demand therefor. |
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| SECTION 8.04 | Successors and Assigns. |
| (a) | The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) no Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by a Credit Party without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. |
| (b) | (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons (other than an Ineligible Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of: |
| (A) | the Borrower, provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof, and provided further that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee; and |
| (B) | the Administrative Agent, and |
| (ii) | Assignments shall be subject to the following additional conditions: |
| (A) | except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender's Commitment, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing; |
| (B) | each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement; |
| (C) | the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $10,000; |
| (D) | the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee's compliance procedures and Applicable Laws, including federal, provincial and state securities laws; and |
| (E) | any assignments of all or a portion of a Lender's Commitment or other rights and obligations under this Agreement relating to the Borrower shall be made to a Qualified Lender. |
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For the purposes of this SECTION 8.04(b), the terms "Approved Fund" and "Ineligible Institution" have the following meanings:
"Approved Fund" means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
"Ineligible Institution" means a (a) natural person, (b) a Defaulting Lender or its parent, (c) company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof; provided that, such company, investment vehicle or trust shall not constitute an Ineligible Institution if it (x) has not been established for the primary purpose of acquiring any Loans or Commitments, (y) is managed by a professional advisor, who is not such natural person or a relative thereof, having significant experience in the business of making or purchasing commercial loans, and (z) has assets greater than $25,000,000 and a significant part of its activities consist of making or purchasing commercial loans and similar extensions of credit in the ordinary course of its business, (d) the Borrower or Affiliate thereof or (e) at all times that no Event of Default has occurred and is continuing, a competitor of the Borrower.
| (iii) | Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of SECTION 2.16, SECTION 2.02, SECTION 2.12 and SECTION 8.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this SECTION 8.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section. |
| (iv) | The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. |
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| (v) | Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee's completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to SECTION 2.07(b), SECTION 2.14(b) or SECTION 8.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph. |
| (c) | Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a "Participant") other than an Ineligible Institution in all or a portion of such Lender's rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender's obligations under this Agreement shall remain unchanged; (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (C) the Borrower, the Administrative Agent and the other Lender shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to SECTION 8.02(c) that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of SECTION 2.13 and SECTION 2.12 (subject to the requirements and limitations therein, including the requirements under SECTION 2.13(f) and SECTION 2.13(g) (it being understood that the documentation required under SECTION 2.13(f)(i) shall be delivered to the participating Lender and the information and documentation required under SECTION 2.13(f)(ii) will be delivered to the Borrower and the Administrative Agent)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of SECTION 2.14 and SECTION 2.15 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under SECTION 2.13 or SECTION 2.12, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. |
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| (d) | Each Lender that sells a participation agrees, at the Borrower's request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of SECTION 2.15(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of SECTION 8.08 as though it were a Lender, provided such Participant agrees to be subject to the terms hereof as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant's interest in the Loans or other obligations under this Agreement or any other Loan Document (the "Participant Register"); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any Commitments, Loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register. |
| (e) | Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. |
| SECTION 8.05 | Survival. |
All covenants, agreements, representations and warranties made by the Borrower in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of SECTION 2.12, SECTION 2.13, SECTION 8.03 and Article 7 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.
| SECTION 8.06 | Counterparts; Integration; Effectiveness; Electronic Execution. |
| (a) | This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Transaction Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in SECTION 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. |
| (b) | Delivery of an executed counterpart of a signature page of this Agreement by telecopy, emailed pdf or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement. The words "execution," "signed," "signature," "delivery," and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby or thereby shall be deemed to include Electronic Signatures, deliveries 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, physical delivery thereof 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 Electronic Commerce Act (Ontario) and similar laws in relevant jurisdictions; provided that nothing herein shall require the Administrative Agent to accept electronic signatures in any form or format without its prior written consent. |
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| SECTION 8.07 | Severability. |
Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
| SECTION 8.08 | Right of Setoff. |
If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the Secured Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured. The applicable Lender shall notify the Borrower and the Administrative Agent of such set-off or application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such set-off or application under this Section. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.
| SECTION 8.09 | Governing Law; Jurisdiction; Consent to Service of Process. |
| (a) | The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein, provided, however, that if the laws of any jurisdiction other than the Province of Ontario shall govern in regard to the validity, perfection or effect of perfection of any Lien or in regard to procedural matters affecting enforcement of any Liens on all or any party of the Collateral, such laws of such other jurisdictions shall continue to apply to that extent. |
| (b) | The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any Ontario court or Canadian federal court sitting in Toronto, Ontario in any action or proceeding arising out of or relating to any Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Province of Ontario or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction. |
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| (c) | The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. |
| (d) | Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in SECTION 8.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. |
| SECTION 8.10 | WAIVER OF JURY TRIAL. |
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, OTHER AGENT (INCLUDING ANY LEGAL COUNSEL) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
| SECTION 8.11 | Confidentiality. |
| (a) | Each party and each of their officers, directors and other advisers (each, a "Receiving Party") agrees to maintain the confidentiality of all Information of a confidential nature furnished or delivered to it pursuant to or in connection with the Transaction Documents. Such confidential Information may be used by the Receiving Parties only for the purpose for which it was disclosed to them and may be disclosed only for the purpose of or in connection with the transactions contemplated by the Transaction Documents to: |
| (i) | such party's Affiliates or such party's or its Affiliates' directors, officers, employees, agents, accountants, auditors, legal counsel and other representatives (collectively, "Receiving Party Representatives"), in each case, who need to know such information for the purpose of assisting in the negotiation, completion and administration of such Transaction Documents, provided that any such Receiving Party Representative is made aware of the Receiving Party's obligations under this SECTION 8.11 prior to such disclosure being made; |
| (ii) | such party's permitted assigns, transferee, successors and participants to the extent such disclosure is made pursuant to a written agreement to hold such information upon substantially the same terms as this SECTION 8.11 or such other terms as may be agreed by the Servicers and the Lenders; |
| (iii) | any person who is a party to a Transaction Document; |
| (iv) | the extent required by Applicable Law or requested or required by any Governmental Authority; |
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| (v) | the extent that such party needs to disclose the same for the exercise, protection or enforcement of any of its rights under any of the Transaction Documents or in connection with any action or proceeding relating to any Transaction Document or, in the case of the Administrative Agent, for the purpose of discharging, in such manner as it thinks fit, its duties or obligations under or in connection with the Transaction Documents in each case to such persons as require to be informed of such information for such purposes or, in the case of the Administrative Agent, in connection with transferring or purporting to transfer its rights and obligations to any successor Administrative Agent; and |
| (vi) | if the applicable party shall have consented, in writing, to such disclosure. |
| (b) | No announcement or public disclosure, including but not limited to any press release, relating to the Commitments or the Loans and the transactions contemplated under the Transaction Documents may be made prior to receiving written approval from the Administrative Agent. If any of the Borrower Parties plan to publish any press release and/or other materials relating to the Commitments or the Loans and the transactions contemplated under the Transaction Documents or aspects of the to the Commitments or the Loans and the transactions contemplated under the Transaction Documents, the Borrower shall notify the Administrative Agent in writing of any such publication at least five (5) Business Days prior to such publication and provide a draft of such press release and/or other materials to the Administrative Agent for its review and approval. |
| SECTION 8.12 | Several Obligations; Non-reliance; Violation of Law. |
The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined in Regulation U of the Board) for the repayment of the Loans provided for herein. Anything contained in this Agreement to the contrary notwithstanding, no Lender shall be obligated to extend credit to the Borrower in violation of any Requirement of Law.
| SECTION 8.13 | USA PATRIOT Act. |
Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the USA PATRIOT Act.
| SECTION 8.14 | Disclosure. |
The Borrower, each Lender hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with the Borrower and its respective Affiliates.
| SECTION 8.15 | Appointment for Perfection. |
Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the other Secured Parties, in assets which, in accordance with the PPSA, the Securities Transfer Act (Ontario) or any other Applicable Law can be perfected only by possession or control. Should any Lender (other than the Administrative Agent) obtain possession or control of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent's request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent's instructions.
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| SECTION 8.16 | Interest Rate Limitation. |
Notwithstanding anything herein to the contrary, if at any time the Applicable Rate to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under Applicable Law (collectively the "Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for, charged, taken, received or reserved by the Lenders holding such Loan in accordance with Applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon to the date of repayment, shall have been received by such Lender.
| SECTION 8.17 | No Advisory or Fiduciary Responsibility. |
In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Transaction Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement provided by the Lenders are arm's-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Lenders and their Affiliates, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Transaction Documents; (ii) (A) each of the Lenders and their Affiliates is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) no Lender or any of its Affiliates has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except, in the case of a Lender, those obligations expressly set forth herein and in the other Loan Documents; and (iii) each of the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and no Lender or any of its Affiliates has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against each of the Lenders and their Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
| SECTION 8.18 | Acknowledgement and Consent to Bail-In of EEA Financial Institutions. |
Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
| (a) | the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and |
| (b) | the effects of any Bail-In Action on any such liability, including, if applicable: |
| (i) | a reduction in full or in part or cancellation of any such liability; |
| (ii) | a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or |
| (iii) | the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority. |
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| SECTION 8.19 | Judgment Currency Conversion. |
| (a) | The obligations of the Borrower hereunder and under the other Loan Documents to make payments in dollars or in CAD, as the case may be (the "Obligation Currency"), shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Borrower of the full amount of the Obligation Currency expressed to be payable to the Borrower under this Agreement or the other Loan Documents. If, for the purpose of obtaining or enforcing judgment against the Borrower in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the "Judgment Currency") an amount due in the Obligation Currency, the conversion shall be made, at the Administrative Agent's quoted rate of exchange prevailing, in each case, as of the date immediately preceding the day on which the judgment is given (such Business Day being hereinafter referred to as the "Judgment Currency Conversion Date"). |
| (b) | If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, the Borrower covenants and agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency Conversion Date. Any amount due from the Borrower under this SECTION 8.19 shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of any of the Loan Documents. |
| (c) | For purposes of determining the prevailing rate of exchange, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency. |
| SECTION 8.20 | Canadian Anti-Money Laundering Legislation. |
| (a) | The Borrower acknowledges that, pursuant to the Proceeds of Crime Act and other applicable anti-money laundering, anti-terrorist financing, government sanction and "know your client" laws (collectively, including any guidelines or orders thereunder, "AML Legislation"), the Secured Parties may be required to obtain, verify and record information regarding the Borrower and their respective directors, authorized signing officers, direct or indirect shareholders or other Persons in control of the Borrower, and the transactions contemplated hereby. The Borrower shall promptly provide all such information, including supporting documentation and other evidence, as may be reasonably requested by any Secured Party or any prospective assignee or participant of a Secured Party or the Administrative Agent, in order to comply with any applicable AML Legislation, whether now or hereafter in existence. |
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| (b) | If the Administrative Agent has ascertained the identity of the Borrower or any authorized signatories of the Borrower for the purposes of applicable AML Legislation, then the Administrative Agent: |
| (i) | shall be deemed to have done so as an agent for each Secured Party, and this Agreement shall constitute a "written agreement" in such regard between each Secured Party and the Administrative Agent within the meaning of the applicable AML Legislation; and |
| (ii) | shall provide to each Secured Party copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness. |
Notwithstanding the preceding sentence and except as may otherwise be agreed in writing, each of the Secured Parties agrees that the Administrative Agent has no obligation to ascertain the identity of the Borrower or any of its authorized signatories on behalf of any Secured Party, or to confirm the completeness or accuracy of any information it obtains from the Borrower or any of its authorized signatories in doing so.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
| CURO CANADA RECEIVABLES II LIMITED PARTNERSHIP, by its general partner, CURO CANADA RECEIVABLES II GP INC., as the Borrower | ||
|
| ||
| By: | /s/ Gary Fulk | |
| Name: Gary Fulk | ||
| Title: President | ||
Signature Page to Credit Agreement
|
CURO CANADA RECEIVABLES II GP INC.,
| ||
| By | /s/ Gary Fulk | |
| Name: Gary Fulk | ||
| Title: President | ||
Signature Page to Credit Agreement
| ACM AIF EVERGREEN P3 DAC SUBCO LP, as Lender | ||
| By: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Credit Agreement
| ATALAYA ASSET INCOME FUND PARALLEL 345 LP, as Lender | ||
| By: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Credit Agreement
| ACM A4 P2 DAC SUBCO LP, as Lender | ||
| By: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Credit Agreement
| ACM ALAMOSA I LP, as Lender | ||
| By: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Credit Agreement
| ACM ALAMOSA I-A LP, as Lender | ||
| By: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Credit Agreement
| MIDTOWN MADISON MANAGEMENT LLC, as the Administrative Agent | ||
| By: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Credit Agreement
Exhibit 10.10
LIMITED GUARANTY
This LIMITED GUARANTY, dated as of May 12, 2023 (this “Limited Guaranty”), is made by CURO GROUP HOLDINGS CORP. (the “Guarantor”) in favor of MIDTOWN MADISON MANAGEMENT LLC (“Midtown Madison”), as administrative agent for the Lenders (in such capacity, the “Agent”).
W I T N E S S E T H :
WHEREAS, CURO Canada Receivables II Limited Partnership, by its General Partner, CURO Canada Receivables II GP Inc. (“Borrower”), has entered into that certain Asset-Backed Revolving Credit Agreement of even date herewith (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement) with the Agent and each of the financial institutions from time to time party thereto (each a “Lender” and collectively, the “Lenders”), pursuant to which the Lenders have agreed to extend a revolving credit facility to Borrower, subject to the terms and conditions set forth in the Credit Agreement;
WHEREAS, the Guarantor indirectly owns 100% of the partnership interests of Borrower and hereby acknowledges that it will benefit from the transactions contemplated by the Credit Agreement; and
WHEREAS, the Lenders are unwilling to make the Loans unless the Guarantor unconditionally indemnifies the Agent, for itself and for the benefit of the Lenders, for the payment and performance of the Indemnified Obligations (as defined herein).
NOW, THEREFORE, in consideration of the promises contained herein, and for good and valuable consideration, the sufficiency of which is hereby acknowledged, and to induce the Lenders to enter into the Credit Agreement and to make the Loans to Borrower thereunder, the Guarantor hereby agrees as follows:
SECTION 1. GUARANTY.
(a) Until the Termination Date, the Guarantor hereby unconditionally and irrevocably (i) indemnifies and saves harmless the Agent, for the ratable benefit of the Lenders, for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all of the Indemnified Obligations (as defined below) and (ii) agrees to pay all documented costs and expenses incurred by the Agent (including the reasonable and documented fees and disbursements of counsel and other professionals) in connection with (A) enforcing or defending its rights under or in respect of this Limited Guaranty or (B) collecting the Indemnified Obligations or otherwise administering this Limited Guaranty (including amounts that would become due but for the operation of the automatic stay under any Insolvency Law). Until the Termination Date, the Guarantor hereby irrevocably and unconditionally covenants and agrees that it is liable for the Indemnified Obligations as a primary obligor.
(b) The Guarantor hereby agrees, in furtherance of the foregoing and not in limitation of any other right which the Agent or any Lender may have at law or in equity against the Guarantor by virtue hereof, that upon the failure of Borrower to pay any of the Indemnified Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under any Insolvency Law, the Guarantor will, within five (5) Business Days of demand, pay, or cause to be paid, in cash, to the Agent for the ratable benefit of the Lenders (and for distribution to the Lenders pursuant to and in accordance with the Credit Agreement), an amount equal to the sum of the unpaid Indemnified Obligations then due as aforesaid. The Guarantor hereby agrees that all payments hereunder will be paid to the Agent without setoff, deduction or counterclaim at the office of the Agent located at the address specified in Section 11 in Canadian Dollars and in immediately available funds.
SECTION 2. Definition of Indemnified Obligations. As used herein, the term “Indemnified Obligations” means:
(a) any liability, claim, loss, damage, cost or expense of whatever kind or nature, known or unknown, foreseen or unforeseen, contingent or otherwise suffered or incurred by the Agent or any Lender (including any reasonable and documented attorneys’ fees and expenses) with respect to the transactions contemplated under the Transaction Documents, in each case, solely to the extent resulting from or arising out of the occurrence of any one or more of the following:
(i) any acts of fraud, willful misconduct, intentional misappropriation of funds or theft by Borrower, the Guarantor, or any other CURO Entity, their respective Subsidiaries or Affiliates, or any employee, shareholder, manager, director, agent or officer of any of the foregoing (each individually and collectively referred to herein as a “Related Party”) (including the acceptance of dividends, distributions or payments made by Borrower in contravention of the Transaction Documents);
(ii) any Change of Control not expressly permitted under the Credit Agreement or otherwise approved in writing by Agent, at its sole option and in its sole discretion;
(iii) any unauthorized sale, transfer, assignment or encumbrance of the Collateral in violation of the Transaction Documents;
(iv) any Related Party causes Borrower to breach the provisions of Section 5.04 of the Credit Agreement;
(v) the assertion by any Related Party of any claim, defense, or offset against the Agent or any Lender that such Person has expressly waived or agreed not to assert;
(vi) any representation made by a Related Party in any Transaction Document that was, to the actual knowledge of the Guarantor, at the time such representation was made under such Transaction Document, untrue when made; or
(vii) the breach in any material respect of any representation or warranty of the Guarantor under this Limited Guaranty or the breach of any covenant of the Guarantor under this Limited Guaranty;
(viii) in any case or proceeding under an Insolvency Law or in any other judicial proceeding, any Related Party makes application to a court to declare that (A) all or any portion of the lien of the Agent or the obligations of Borrower to pay principal and interest as specified in the Transaction Documents be rescinded, set aside, or determined to be void or unenforceable or (B) any of the terms of any of the Transaction Documents be modified without Agent’s consent or the consent of each Person whose consent is required by the terms of such Transaction Document;
(ix) the voluntary dissolution or liquidation of Borrower;
(x) the substantive consolidation of Borrower with the Guarantor or any other CURO Entity under any proceeding under any Insolvency Law;
(xi) Borrower files a voluntary petition under any Insolvency Law, or consents to any such filing, or commences a proceeding for the appointment of a receiver, interim receiver, receiver and manager, monitor, trustee, liquidator or conservator of Borrower or of the whole or any substantial part of the Collateral; or
(xii) an officer, director, representative of, or Person which owns or controls, directly or indirectly, any Related Party files, or joins in the filing of, an involuntary petition against Borrower under any Insolvency Law, which is not dismissed within sixty (60) days of the date of its filing, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower from any Person; and
(b) the due and punctual performance and observance by any CURO Entity (other than the Borrower) of its obligations under the Transaction Documents and of all of the terms, covenants, conditions, agreements and undertakings to be performed or observed by any CURO Entity (other than the Borrower), in any capacity, under the Transaction Documents in accordance with the terms hereof and thereof including any agreement of any CURO Entity (other than the Borrower), in any capacity, to pay any money under the Transaction Documents (including amounts that would become due but for the operation of the automatic stay under any Insolvency Law), in each case after any applicable grace periods or notice requirements, according to the terms of the Transaction Documents.
SECTION 3. Guaranty Absolute. The Guarantor hereby agrees, as the principal obligor and not as a guarantor or surety only, to indemnify and save harmless the Agent that the Indemnified Obligations will be paid strictly in accordance with the terms of the Credit Agreement and the other Transaction Documents. The guarantees provided by the Guarantor in the Limited Guaranty are in no way conditioned upon any requirement that Agent or any Lender first attempt to collect any payment from any other Person or resort to any collateral security, any balance of any deposit account or credit on the books of the Borrower, Agent, or any Lender in favor of any CURO Entity or the Borrower, as the case may be, or any other Person or other means obtaining payment hereunder. The liability of the Guarantor under this Limited Guaranty shall be absolute, irrevocable and unconditional irrespective of:
(a) any lack of validity, regularity or enforceability of the Credit Agreement or any other Transaction Document;
(b) any lack of validity, regularity or enforceability of this Limited Guaranty;
(c) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from the Credit Agreement or any other Transaction Document;
(d) any exchange, release or non-perfection of any security interest in any Collateral, or any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Obligations;
(e) any failure on the part of the Agent or any other Person to exercise, or any delay in exercising, any right under the Credit Agreement or any other Transaction Document; or
(f) any other circumstance which might otherwise constitute a defense available to, or a discharge of, Borrower, the Guarantor or any other guarantor with respect to the Indemnified Obligations (including, without limitation, all defenses based on suretyship or impairment of the Collateral, and all defenses that Borrower may assert to the repayment of the Indemnified Obligations, including, without limitation, failure of consideration, breach of warranty, payment, statute of frauds, bankruptcy, lack of legal capacity, statute of limitations, lender liability, accord and satisfaction, and usury, other than, in each case, any defense that the Indemnified Obligations have been paid in full in cash other than contingent indemnification obligations for which demand has not been made), this Limited Guaranty and the obligations of the Guarantor under this Limited Guaranty.
The Guarantor hereby agrees that if Borrower or any other guarantor of all or a portion of the Indemnified Obligations is the subject of a bankruptcy case under any Insolvency Law, it will not assert the pendency of such case or any order entered therein as a defense to the timely payment of the Indemnified Obligations. The Guarantor hereby waives notice of or proof of reliance by the Agent or any Lender upon this Limited Guaranty, and the Indemnified Obligations shall conclusively be deemed to have been created, contracted, incurred, renewed, extended, amended or reduced (as to Borrower only) in reliance upon this Limited Guaranty.
SECTION 4. Taxes.
(a) The Guarantor shall make all payments hereunder free and clear of and without deduction for any Taxes to the extent such Taxes would be payable by Borrower to any Lender or the Agent in accordance with the Credit Agreement. If the Guarantor shall be required by law to deduct or withhold any Taxes from or in respect of any sum payable hereunder to or for the benefit of the Agent or any Lender, (A) the sum payable shall be increased as may be necessary so that after making all required deductions or withholdings of Taxes (including deductions or withholdings of Taxes applicable to additional sums payable under this Subsection 4(a) or under Section 2.13 of the Credit Agreement) the Agent or such Lender receives an amount equal to the sum it would have received had no such deductions or withholdings been made, (B) the Guarantor shall make such deductions or withholdings and (C) the Guarantor shall pay the full amount so deducted or withheld to the relevant taxation authority or other Governmental Authority in accordance with applicable law.
(b) The Guarantor agrees to indemnify each party for the full amount of Taxes not deducted or withheld or paid by the Guarantor in accordance with Subsection 4(a) hereof to the relevant taxation or other authority and any Indemnified Taxes imposed by any jurisdiction on the amounts payable by the Guarantor under this Limited Guaranty and paid by any party, and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not any such Indemnified Taxes were correctly or legally asserted. Payment under this indemnification shall be made within fifteen (15) Business Days from the date the Agent makes written demand therefor. A certificate as to the amount of such Indemnified Taxes and evidence of payment thereof submitted to the Guarantor by the Agent shall be prima facie evidence of the amount due from the Guarantor to a party.
(c) The Guarantor shall furnish to the Agent the original or a certified copy of a receipt evidencing any payment of Taxes made by the Guarantor as soon as such receipt becomes available, together with a certificate of an officer of the Guarantor, which certificate indicates the amount of Indemnified Taxes deducted or withheld by the Guarantor in respect of payments made hereunder.
(d) Without prejudice to the survival of any other agreement or obligation of the Guarantor hereunder, the obligations of the Guarantor under this Section 4 shall survive the termination of this Limited Guaranty and the payment of the Indemnified Obligations.
SECTION 5. Fraudulent Conveyance. Notwithstanding any provision of this Limited Guaranty to the contrary, it is intended that this Limited Guaranty not constitute a “Fraudulent Conveyance” (as defined below). Consequently, the Guarantor agrees that if this Limited Guaranty, or any Liens securing the obligations and liabilities arising pursuant to this Limited Guaranty, would, but for the application of this sentence, constitute a Fraudulent Conveyance, this Limited Guaranty and each such Lien shall be valid and enforceable only to the maximum extent that would not cause this Limited Guaranty or such Lien to constitute a Fraudulent Conveyance, and this Limited Guaranty shall automatically be deemed to have been amended accordingly at all relevant times. For purposes hereof, “Fraudulent Conveyance” means a fraudulent conveyance or fraudulent transfer under any section of any Insolvency Law or otherwise (including, for the avoidance of doubt, under any assignments for the benefit of creditors, transfers at undervalue, preferences and fraudulent conveyances Laws of Canada or any province or territory therein or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally).
SECTION 6. Waiver. The Guarantor hereby waives, for the benefit of the Agent and the Lenders (a) any right to require any Agent or any Lender, as a condition of payment or performance by the Guarantor, to (i) proceed against Borrower, any other guarantor of the Indemnified Obligations or any other Person, (ii) proceed against or exhaust any security held from Borrower, any such other guarantor or any other Person, (iii) proceed against or have resort to any balance of any deposit account or credit on the books of the Agent or any Lender in favor of Borrower or any other Person or (iv) pursue any other remedy in the power of the Agent or any Lender whatsoever; (b) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of Borrower or any other guarantor including any defense based on or arising out of the lack of validity or the unenforceability of the Indemnified Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of Borrower or any other guarantor from any cause other than payment in full of the Indemnified Obligations; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (d) any defense based upon the Agent or any Lender’s errors or omissions in the administration of the Indemnified Obligations, except errors and omissions resulting from the Agent or any Lender’s gross negligence or willful misconduct; (e)(i) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms hereof and any legal or equitable discharge of the Guarantor’s obligations hereunder, (ii) the benefit of any statute of limitations affecting the Guarantor’s liability hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any requirement that any Lender protect, secure, perfect or insure any security interest or lien or any property subject thereto; (f) notices, demands, presentments, protests, notices of protest, notices of dishonor and notices of any action or inaction, including acceptance hereof, notices of default hereunder, or any other Transaction Document, notices of any renewal, extension or modification of the Indemnified Obligations or any Transaction Document, notices of any extension of credit to Borrower and notices of any of the matters referred to in Section 3 and any right to consent to any thereof; and (g) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms hereof.
SECTION 7. Subrogation; Subordination. The Guarantor hereby agrees that it will not exercise or assert any rights or claims which it may acquire against Borrower or any other guarantor of all or part of the Indemnified Obligations that arise from the existence, payment, performance or enforcement of its obligations hereunder (including, without limitation, any rights or claims of subrogation, reimbursement or contribution), until the Termination Date. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence, such amount shall be held in trust for the benefit of the Agent and shall forthwith be paid to the Agent for the benefit of the Lenders to be credited and applied against the Indemnified Obligations, whether matured or unmatured, in such order as the Agent may determine. Any Indebtedness of Borrower now or hereafter held by the Guarantor is hereby subordinated in right of payment to the Indemnified Obligations, and any such indebtedness collected or received by the Guarantor after an Event of Default has occurred and is continuing shall be held in trust for the Agent on behalf of the Lenders and shall forthwith be paid over to the Agent for the benefit of the Lenders to be credited and applied against the Indemnified Obligations but without affecting, impairing or limiting in any manner the liability of the Guarantor under any other provision hereof.
SECTION 8. Representations and Warranties.
(a) The Guarantor has, independently and without reliance upon the Agent or any Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Limited Guaranty.
(b) The Guarantor makes the following additional representations and warranties as of the date hereof:
(1) It is validly formed, duly organized and existing and in good standing as a company under the laws of Delaware.
(2) It has all requisite power and authority to execute and deliver this Limited Guaranty and to perform its obligations hereunder.
(3) It is duly qualified to do business and in receipt of all necessary licenses and approvals in each jurisdiction where the failure to be so qualified, licensed or approved could reasonably be expected to have a Material Adverse Effect.
(4) The execution and delivery of this Limited Guaranty, and the performance of its obligations hereunder, have been duly and validly authorized by all necessary actions or proceedings.
(5) This Limited Guaranty constitutes the legal, valid and binding obligations of the Guarantor, enforceable against the Guarantor in accordance with its terms, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership and other laws affecting creditors’ rights generally and by general principles of equity (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law), and except as rights to indemnity and contribution hereunder may be limited by federal or state securities laws or principles of public policy.
(6) Neither the execution and delivery by the Guarantor of this Limited Guaranty, nor the performance of its obligations hereunder, (i) conflicts with or violates or results in a breach of any of the provisions of, or constitutes a default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which it is a party or by which it or any of its property is bound or (ii) conflicts with or violates any Requirements of Law of any Governmental Authority having jurisdiction over it.
(7) There are no legal or administrative proceedings or investigations pending or, to the actual knowledge of a Responsible Officer of the Guarantor, threatened, against it by any Governmental Authority or body or any arbitrator with respect to (i) the Guarantor, except as would not reasonably be expected to cause a Material Adverse Effect or (ii) the Transaction Documents or any of the transactions contemplated in the Transaction Documents.
(8) No approval, authorization, declaration or consent of, or registration with, any Governmental Authority, other than those approvals, authorizations, declarations, consents or registrations received or completed as of the date hereof, is necessary for the execution or delivery by the Guarantor of any of this Limited Guaranty or the performance of its obligations hereunder.
(9) The Guarantor represents that it is in compliance, and will continue to be in compliance, with all applicable anti-money laundering laws and regulations, including the Uniting and Strengthening America by Providing Appropriate Tools to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), the Bank Secrecy Act, as amended by the USA PATRIOT Act, where applicable, and the regulations thereunder, and FINRA Conduct Rule 3011. The Guarantor represents that it has established an Anti-Money Laundering (“AML”) Program (“AML Program”) that is designed to comply with applicable U.S. laws, regulations, and guidance, including rules of self-regulatory organizations, relating to the prevention of money laundering, terrorist financing, and related financial crimes. The Guarantor shall have in place written policies, procedures and controls designed to detect, prevent and report money laundering or other suspicious activity as well as a written customer identification program. The written customer identification program shall require the identification and verification of the identities of customers and, if required by applicable anti-money laundering laws and regulations, the underlying beneficial owner(s). In addition, the Guarantor shall have a designated anti-money laundering compliance officer, and provide anti-money laundering training to its staff. Finally, the Guarantor’s anti-money laundering program shall provide for an independent audit of its anti-money laundering program. The Guarantor will promptly inform Midtown Madison in writing, to the extent not prohibited by applicable law, if the Guarantor becomes aware of any violations of the USA Patriot Act, any regulation implementing the USA Patriot Act, or its anti-money laundering program.
(10) Neither the Guarantor nor any of its subsidiaries, , nor any director, officer, or employee of the Guarantor or any of its subsidiaries, nor any agent, affiliate or other person associated with or acting on behalf of the Guarantor or any of its subsidiaries, has (i) used any funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery or anticorruption laws; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Guarantor and its subsidiaries have instituted, maintain and enforce, and will continue to maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.
(11) In addition to and without limitation of any of the foregoing, this Limited Guaranty shall be deemed to be a Transaction Document.
SECTION 9. Right of Setoff. In addition to and not in limitation of all rights of offset that the Agent and each Lender or any of their respective Affiliates may have under applicable law, and whether or not the Agent or any Lender has made any demand or the obligations of the Guarantor have matured, the Agent and each Lender and their respective Affiliates shall have the right to set off and apply any and all deposits (general or special, time or demand, provisional or final, or any other type) at any time held and any other Indebtedness at any time owing by the Agent or any Lender or any of their respective Affiliates to or for the credit or the account of the Guarantor against any and all of the Indemnified Obligations. If the Agent or any Lender exercises any of its rights under this Section 9, the Agent or such Lender, as the case may be, shall provide notice to the Guarantor of such exercise, provided that the failure to give such notice shall not affect the validity of the exercise of such rights.
SECTION 10. Survival of Provisions. All payment obligations, covenants, representations, warranties and waivers and indemnities made by the Guarantor under this Limited Guaranty shall survive the execution, delivery, and termination of this Limited Guaranty until the Transaction Documents are terminated and the Obligations (other than indemnity obligations under the Transaction Documents that are not then due and payable or for which any events or claims that would give rise thereto are not then pending) have been paid in full in cash (such date, the “Termination Date”).
SECTION 11. Notices. All notices and other communications hereunder shall be in writing and sent by certified or registered mail, return receipt requested, by overnight delivery service, with all charges prepaid, by hand delivery, or by e-mail, if to the Agent, then to [* * * * *], and if to the Guarantor, then to [* * * * *], or in each case, to such other address as the Guarantor or the Agent may specify to the other party in the manner required hereunder. All such notices and correspondence shall be deemed given (i) if sent by certified or registered mail, when received, (ii) if sent by overnight delivery service or by hand delivery, when received at the above stated addresses or when delivery is refused and (iii) if sent by e-mail transmission, when such transmission is delivered.
SECTION 12. Amendments, Waivers and Consents. No amendment or waiver of any provision of this Limited Guaranty, or consent to any departure by the Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Agent and, in the case of an amendment, the Guarantor, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
SECTION 13. Delays; Partial Exercise of Remedies. No delay or omission of the Agent to exercise any right or remedy hereunder shall impair any such right or operate as a waiver thereof. No single or partial exercise by the Agent of any right or remedy shall preclude any other or further exercise thereof, or preclude any other right or remedy.
SECTION 14. Telecopied Signature. This Limited Guaranty may be executed and delivered by electronic transmission all with the same force and effect as if the same was a fully executed and delivered original manual counterpart.
SECTION 15. Severability. In case any provision in or obligation under this Limited Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 16. Interpretation. To the extent a term or provision of this Limited Guaranty conflicts with the Credit Agreement and is not addressed herein with more specificity, the Credit Agreement shall control with respect to the subject matter of such term or provision.
SECTION 17. Continuing Guaranty; Assignments of Guaranteed Debt. This Limited Guaranty shall (a) remain in full force and effect until the Termination Date, (b) be binding upon the Guarantor and its successors and assigns, and (c) inure, together with the rights and remedies of the Agent hereunder, to the Agent’s own benefit and to its successors and assigns. Without limiting the generality of the foregoing clause (c), the Agent may, in accordance with the terms of the Credit Agreement, assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement to any successor agent, and such successor agent shall thereupon become vested with all the benefits in respect hereof granted to the Agent herein or otherwise, in each case as provided in the Credit Agreement.
SECTION 18. Reinstatement. To the extent permitted by law, this Limited Guaranty shall continue to be effective or be reinstated if at any time any amount received by the Agent or any Lender in respect of the Obligations is rescinded or must otherwise be restored or returned by the Agent or such Lender upon the occurrence or during the pendency of any bankruptcy, reorganization or other similar proceeding applicable to the Guarantor, or upon or during the occurrence of any dissolution, liquidation or winding up of the Guarantor, all as though such amount had not been received.
SECTION 19. Bankruptcy, etc.
(a) The obligations of the Guarantor hereunder shall not be reduced, limited, impaired, discharged, deferred, suspended or terminated by any case or proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, winding-up, dissolution, liquidation or arrangement of Borrower or any other Guarantor or by any defense which Borrower or any other Guarantor may have by reason of the order, decree or decision of any court or administrative body resulting from any such proceeding.
(b) The Guarantor acknowledges and agrees that any interest on any portion of the Indemnified Obligations which accrues after the commencement of any case or proceeding referred to in clause (a) above (or, if interest on any portion of the Indemnified Obligations ceases to accrue by operation of law by reason of the commencement of such case or proceeding, such interest as would have accrued on such portion of the Indemnified Obligations if such case or proceeding had not been commenced) shall be included in the Indemnified Obligations because it is the intention of the Guarantor and the Lenders that the Indemnified Obligations which are indemnified by the Guarantor pursuant hereto should be determined without regard to any rule of law or order which may relieve Borrower of any portion of such Indemnified Obligations. The Guarantor will permit any trustee in bankruptcy, receiver, interim receiver, receiver and manager, monitor, debtor in possession, assignee for the benefit of creditors or similar person to pay Agent, or allow the claim of the Agent in respect of, any such interest accruing after the date on which such case or proceeding is commenced.
SECTION 20. Financial Condition of Borrower. Any Advance may be made to Borrower or continued from time to time, without notice to or authorization from any Guarantor regardless of the financial or other condition of Borrower at the time of any such grant or continuation. Neither the Agent nor any Lender shall have any obligation to disclose or discuss with any Guarantor its assessment, or any Guarantor’s assessment, of the financial condition of Borrower. The Guarantor has adequate means to obtain information from Borrower on a continuing basis concerning the financial condition of any Borrower and its ability to perform their respective obligations under the Transaction Documents, and the Guarantor assumes the responsibility for being and keeping informed of the financial condition of Borrower and of all circumstances bearing upon the risk of nonpayment of the Indemnified Obligations. The Guarantor hereby waives and relinquishes any duty on the part of the Agent or any Lender to disclose any matter, fact or thing relating to the business, operations or conditions of Borrower now known or hereafter known by the Agent or any Lender.
SECTION 21. Entire Agreement; Successors and Assigns. This Limited Guaranty constitutes the entire agreement between the parties hereto, supersedes any prior written and verbal agreements between them, and shall bind and benefit the parties hereto and their respective successors and permitted assigns.
SECTION 22. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS LIMITED GUARANTY AND THE OTHER TRANSACTION DOCUMENTS AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS LIMITED GUARANTY OR ANY OF THE OTHER TRANSACTION DOCUMENTS, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND DECISIONS OF THE STATE OF NEW YORK.
SECTION 23. SUBMISSION TO JURISDICTION. ALL DISPUTES BETWEEN OR AMONG THE GUARANTOR, THE AGENT AND THE LENDERS, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE AND FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, AND THE COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN; PROVIDED, HOWEVER, THAT THE AGENT SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE GUARANTOR OR ITS PROPERTY IN (A) ANY COURTS OF COMPETENT JURISDICTION AND VENUE AND (B) ANY LOCATION SELECTED BY THE AGENT TO ENABLE THE AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT. THE GUARANTOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS, SETOFFS OR CROSS-CLAIMS IN ANY PROCEEDING BROUGHT BY THE AGENT. THE GUARANTOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT HAS COMMENCED A PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON FORUM NON CONVENIENS. BY EXECUTION AND DELIVERY OF EACH TRANSACTION DOCUMENT TO WHICH IT IS A PARTY, THE GUARANTOR (i) ACCEPTS THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY, (ii) WAIVES PERSONAL SERVICE OF PROCESS, and (iii) AGREES THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, PURSUANT TO SECTION 8.01 OF THE CREDIT AGREEMENT.
SECTION 24. JURY TRIAL. THE GUARANTOR (AND BY ITS RECEIPT HEREOF, THE AGENT) HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO (A) THIS LIMITED GUARANTY OR (B) ANY CONDUCT, ACTS OR OMISSIONS OF THE GUARANTOR, THE AGENT, ANY LENDER OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR OTHER AFFILIATES, IN EACH CASE WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE.
SECTION 25. LIMITATION OF LIABILITY. NEITHER THE AGENT NOR ANY LENDER SHALL HAVE ANY LIABILITY TO THE GUARANTOR (WHETHER SOUNDING IN TORT, CONTRACT, OR OTHERWISE) FOR LOSSES SUFFERED BY THE GUARANTOR IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS OR RELATIONSHIPS CONTEMPLATED BY THIS LIMITED GUARANTY, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OR COURT ORDER BINDING ON THE AGENT OR SUCH LENDER THAT THE LOSSES WERE THE RESULT OF ACTS OR OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE AGENT OR SUCH LENDER. THE GUARANTOR HEREBY WAIVES ALL FUTURE CLAIMS AGAINST THE AGENT AND EACH LENDER FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.
SECTION 26. JUDGMENT CURRENCY. The obligations of the Guarantor hereunder to make payments in dollars or in CAD, as the case may be (the “Obligation Currency”), shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Agent of the full amount of the Obligation Currency expressed to be payable to the Agent under this Agreement or the other Loan Documents. If, for the purpose of obtaining or enforcing judgment against the Guarantor in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the “Judgment Currency”) an amount due in the Obligation Currency, the conversion shall be made, at the Agent's quoted rate of exchange prevailing, in each case, as of the date immediately preceding the day on which the judgment is given (such Business Day being hereinafter referred to as the “Judgment Currency Conversion Date”). If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, the Guarantor covenants and agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency Conversion Date. Any amount due from the Guarantor under this Section shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of any of the Loan Documents. For purposes of determining the prevailing rate of exchange, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency.
[Signature Page Follows]
IN WITNESS WHEREOF, the Guarantor has caused this Limited Guaranty to be executed by its proper and duly authorized officer as of the date first set forth above.
| CURO GROUP HOLDINGS CORP. | ||
| By: | /s/ Doug Clark | |
| Name: Doug Clark | ||
| Title: Chief Executive Officer | ||
Exhibit 10.11
SALE AND SERVICING AGREEMENT
Dated as of May 12, 2023
among
CURO CANADA RECEIVABLES II
LIMITED PARTNERSHIP,
by its general partner,
CURO CANADA RECEIVABLES II GP INC.
as Purchaser
and
CURO CANADA CORP.
as Seller and Servicer
and
LENDDIRECT CORP.
as Seller and Servicer
Table of Contents
| SECTION | PAGE | |
| Article I DEFINITIONS AND PRINCIPLES OF INTERPRETATION | 3 | |
| Section 1.01 | Definitions | 3 |
| Section 1.02 | Interpretation | 17 |
| Section 1.03 | Non-Business Days | 17 |
| Section 1.04 | Currency | 17 |
| Section 1.05 | Schedules | 18 |
| Article II PURCHASE AND SALE OF LOANS | 18 | |
| Section 2.01 | Purchases and Sales of Purchased Assets pursuant to Purchase Notices | 18 |
| Section 2.02 | Disqualified Receivables | 19 |
| Article III REPRESENTATIONS AND WARRANTIES | 19 | |
| Section 3.01 | Representations and Warranties of the Sellers and the Servicers on each Purchase Date | 19 |
| Section 3.02 | Representations and Warranties of the Purchaser | 24 |
| Article IV COVENANTS | 25 | |
| Section 4.01 | General Covenants of the Sellers and the Servicers | 25 |
| Section 4.02 | Further Assurances | 29 |
| Article V SERVICING OF PORTFOLIO | 29 | |
| Section 5.01 | Appointment of the Servicers | 29 |
| Section 5.02 | Servicing of Portfolio | 29 |
| Section 5.03 | Power of Attorney | 31 |
| Section 5.04 | Deemed Collections | 31 |
| Section 5.05 | Application of Collected Amounts | 31 |
| Section 5.06 | Servicer Advances | 31 |
| Article VI CASH MANAGEMENT AND INSURANCE | 32 | |
| Section 6.01 | Transaction Account | 32 |
| Section 6.02 | Purchaser Discretions | 32 |
| Section 6.03 | Deposit of Collections | 32 |
| Section 6.04 | Payment Terms | 32 |
| Article VII SERVICER TERMINATION | 33 | |
| Section 7.01 | Servicer Termination Events | 33 |
| Section 7.02 | Designation of Replacement Servicer | 33 |
| Section 7.03 | Replacement Servicer Fee | 34 |
| Section 7.04 | Power of Attorney | 34 |
| Section 7.05 | Additional Actions Upon a Servicer Termination Event | 35 |
| Article VIII CONDITIONS PRECEDENT | 35 | |
| Section 8.01 | Conditions to Initial Purchase | 35 |
| Section 8.02 | Conditions to Each Purchase | 36 |
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| Article IX MISCELLANEOUS | 37 | |
| Section 9.01 | Waivers; Amendments | 37 |
| Section 9.02 | Binding Effect; Assignability | 37 |
| Section 9.03 | Notices | 37 |
| Section 9.04 | Indemnification | 37 |
| Section 9.05 | Confidentiality | 38 |
| Section 9.06 | Costs and Expenses | 39 |
| Section 9.07 | Limited Recourse | 39 |
| Section 9.08 | No Petition | 39 |
| Section 9.09 | Time of Essence | 39 |
| Section 9.10 | Failure to Perform | 39 |
| Section 9.11 | Further Assurances | 39 |
| Section 9.12 | Remedies | 40 |
| Section 9.13 | Counterparts; Integration; Effectiveness; Electronic Execution | 40 |
| Section 9.14 | Severability | 40 |
| Section 9.15 | Governing Law; Jurisdiction; Consent to Service of Process | 40 |
| Section 9.16 | Waiver of Jury Trial | 41 |
| Schedule A FORM OF PURCHASE NOTICE | 48 | |
| Annex A RECEIVABLES | 49 | |
| Schedule B ADDRESSES | 50 | |
| Schedule C FORM OF SERVICING REPORT | 51 | |
| Schedule D CREDIT AND COLLECTION POLICIES | 52 | |
ii
THIS SALE AND SERVICING AGREEMENT dated as of May 12, 2023 (as amended, restated, supplemented or otherwise modified from time to time, this "Agreement") is made among the Purchaser, the Servicers and the Sellers.
WHEREAS each of the Sellers wishes to sell, on a fully serviced basis, Eligible Receivables as well as the Related Rights and Collections to the Purchaser from time to time and the Purchaser wishes to purchase, on a fully serviced basis, Eligible Receivables as well as the Related Rights and Collections from the Sellers from time to time, on and subject to the terms and conditions of this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants and agreements of the parties herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Article I
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
Section 1.01 Definitions.
In this Agreement, unless the context otherwise requires, capitalized terms used herein which are not otherwise defined herein have the following meanings.
"Actual Loss Rate" means, at any time, the Default Ratio at such time, multiplied by twelve (12).
"Adverse Claim" means a security interest, lien, mortgage, charge, pledge, assignment, title retention, hypothec, encumbrance, ownership interest or other right or claim, including any filing or registration made in respect thereof, of or through any Person (other than the Purchaser or the Securitization Entity).
"Affiliate" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person.
"Aggregate Eligible Pool Balance" means the number equal to (i) the Aggregate Outstanding Balance of all Purchased Receivables owned by the Purchaser, less (ii) the Excess Portfolio Amounts.
"Aggregate Outstanding Balance" means, as of any date of determination, with respect to all, or such specified portion, of the Receivables (as the context requires), the sum of the aggregate of the Outstanding Balance of all, or such specified portion, of the Receivables as of such date of determination.
"Amortization Event" means any "Amortization Event" arising under any credit agreement to which the Purchaser is a party.
"Anti-Corruption Laws" means all laws, rules, and regulations of any jurisdiction applicable to the Purchaser from time to time concerning or relating to bribery or corruption.
"Anti-Terrorism Laws" means any applicable laws relating to terrorism or money laundering including Executive Order No. 13224, the USA Patriot Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC and other laws administered by the U.S. Department of the Treasury Financial Crimes Enforcement Network, and the Canadian Anti-Money Laundering & Anti-Terrorism Legislation (as any of the foregoing laws may from time to time be amended, renewed, extended, or replaced).
"Applicable Law" means all applicable federal, provincial, state, territorial and local laws, statutes, regulations, rules, executive orders, supervisory requirements, directives, guidelines, circulars, opinions, codes of conduct, decisions, rulings, advisories, bulletins, interpretive letters, and other official releases customarily considered to be binding of or by any government, or any authority, department, or agency thereof, as now and hereafter in effect.
3
"Back-up Servicer" means SST Office Services Inc.
"Back-up Servicing and Verification Agency Agreement" means the Back-up Servicing and Verification Agency Agreement entered into or to be entered into among the Servicers, the Back-up Servicer, the Securitization Entity and the Purchaser.
"Blocked Person" means (i) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; (ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; (iii) a Person with which any Person providing financing under any Securitization Document is prohibited from dealing with or otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) a Person that commits, threatens or conspires to commit or supports "terrorism" as defined in the Executive Order No. 13224; (v) a Person that is named as a "specially designated national" on the most current list published by OFAC at its official website or any replacement website or other replacement official publication of such list; or (vi) a Person who a parent or Subsidiary of a Person listed above.
"Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in Toronto, Ontario and New York City, New York are authorized or required by law to remain closed.
"CAD" or "Canadian Dollars" or "Dollars" or "$" means the lawful currency of Canada.
"Canadian Anti-Money Laundering & Anti-Terrorism Legislation" means the Criminal Code, R.S. 1985, C-46, The Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S. 2000, 17 and the United Nations Act, R.S. 1985, U-2 or any similar Canadian legislation, together with all rules, regulations and interpretations thereunder or related thereto including, without limitation, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism and the United Nations Al-Qaida and Taliban Regulations promulgated under the United Nations Act.
"Charged-Off Receivable" means any Receivable which remains unpaid for more than ninety (90) days from the original due date for such payment or otherwise has been or should have been charged-off or identified by the Servicers as uncollectable in accordance with the Credit and Collection Policies.
"Closing Date" means May 12, 2023.
"Closing Payment" means, with respect to any Purchase, the Closing Payment as set out in the relevant Purchase Notice.
"Collateral Trigger Event" means the occurrence of a Level 1 Collateral Trigger, a Level 2 Collateral Trigger or a Level 3 Collateral Trigger.
"Collection Period" means the period from, and including, the first day of any calendar month to, and including, the last day of such calendar month.
"Collections" means, with respect to any Receivable, (a) all cash collections and other cash proceeds of such Receivable and (b) all cash proceeds in the Related Rights for such Receivable, in each case including, but not limited to, principal, interest, fees, liquidation proceeds, payments received in connection with Insurance and proceeds from Insurance.
"Confidential Personal Information" means any and all information or data protected by Privacy Laws, including (without limitation) information or data that: (a) is personal information or information about an identifiable individual (as more particularly defined in the applicable Privacy Laws) that was collected, used, disclosed or accessible to the Sellers or the Servicers; or (b) is information from which an individual or individual's identity can be ascertained either from the information itself or by combining the information with information from other sources available to the parties.
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"Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Cost of Funds" means, with respect to any Collection Period, a percentage equal to (a) the sum of any interest and fee amounts payable to the Securitization Entity pursuant to Section 2.03(b) of the applicable Securitization Document, divided by (b) the Aggregate Outstanding Balance of all Purchased Receivables as of the last day of such Collection Period; and such resulting quotient multiplied by (c) twelve (12).
"Credit and Collection Policies" means, with respect to the Sellers, the applicable credit and collection and risk underwriting policies for the Receivables as in effect on the Closing Date and approved by the Securitization Entity, namely the documents entitled:
| (a) | Internet Lending Credit Policy – CURO Canada; |
| (b) | Brick and Mortar Credit Policy – CURO Canada; |
| (c) | Internet Lending Credit Policy – LendDirect; |
| (d) | Risk and Analytics Approval Procedures, dated November 2019; |
| (e) | Contact Centre P&P – Recovery Department Only, dated October 27, 2022; and |
| (f) | Due Date Changes – Line of Credit Loans, |
as scheduled in Schedule D hereto, as amended, replaced or supplemented from time to time to the extent permitted under the Transaction Documents.
"Credit Vision Score" means a credit score determined using analytics developed by Trans Union of Canada, Inc. and commonly referred to as a Credit Vision Score.
"CURO Entities" means, collectively, CURO Group Holdings Corp., CURO Financial Technologies Corp. CURO Intermediate Holdings Corp., CURO Management LLC (NV) and each Seller, and "CURO Entity" means any one of them.
"CURO Group Parties" means, collectively, the Purchaser Parties and the CURO Entities, and "CURO Group Party" means any one of them.
"Customer Data" means all data and information supplied or provided or made available directly or indirectly to the Sellers and the Servicers by Obligors, including: (a) Confidential Personal Information; (b) the customer data of the Sellers and the Servicers, (c) the result of the processing of any such data, or data that is generated or derived or collected in any connection with the origination and servicing of the Receivables; and (d) all such data and information of the Sellers' or the Servicers' contractors, agents or other third parties.
"Cut-off Date" means, with respect to any Purchase, the Cut-off Date as set out in the relevant Purchase Notice.
"Data Requirements" means Privacy Laws applicable to the Sellers' and the Servicers' conduct of business, all agreements to which it is bound, and all internal or customer-facing policies of the Sellers and the Servicers, in each case with respect to collection, use, storage, transfer, privacy, protection, or security of information.
"Deemed Collection" has the meaning assigned to such term in Section 5.04.
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"Default Ratio" means, at any time, the weighted average (expressed as a percentage) of the ratios for each of the two immediately preceding Collection Periods computed by dividing, in respect of each such Collection Period, (a) the Aggregate Outstanding Balance as at the end of the last day of the applicable Collection Period of all Purchased Receivables that were Defaulted Receivables as at the end of such day, by (b) the Aggregate Outstanding Balance of all Purchased Receivables as at the end of such day.
"Defaulted Receivable" means a Receivable: (a) as to which the Obligor thereof is Insolvent, (b) which became or should have become charged-off or identified by the Servicers as uncollectable in accordance with the Credit and Collection Policies, or (c) as to which any payment, or part thereof, remains unpaid for more than sixty (60) days and less than ninety-one (91) days from the original due date for such payment.
"Delinquency Ratio" means, at any time, the weighted average (expressed as a percentage) of the ratios for each of the two immediately preceding Collection Periods computed by dividing, in respect of each such Collection Period (a) the Aggregate Outstanding Balance as at the end of the last day of the applicable Collection Period of all Purchased Receivables that were Delinquent Receivables but not Defaulted Receivables as at the end of such day by (b) the Aggregate Outstanding Balance of all Purchased Receivables as at the end of such day.
"Delinquent Receivable" means a Receivable as to which any payment, or part thereof, remains unpaid for more than thirty (30) days and less than sixty-one (61) days from the original due date for such payment.
"Designated Credit Reporting Agency" means each of Equifax, Experian and TransUnion.
"Effective Date" means the date on which the first Purchase is made hereunder.
"Eligible Receivable" means, as at the date of determination, Receivables (net of unearned interest, fees, unearned discounts, insurance commissions, reserves and holdbacks thereon) that are Receivables designated as Line of Credit Loan Receivables, and which meet the following criteria: [* * * * *].
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.
"Event of Default" means any "Event of Default" arising under any credit agreement to which the Purchaser is a party.
"Excess Portfolio Amount" means, at any time of determination, the Aggregate Outstanding Balance by which the Purchased Receivables exceed or do not qualify under the relevant Portfolio Limits at such time.
"Excess Spread Percentage" means, at any time, the weighted average (expressed as a percentage) of the percentage computed for each of the two immediately preceding Collection Periods equal to the Portfolio Yield, less the Actual Loss Rate, less the Cost of Funds, less Servicing Cost, less the Insurance Cost Yield, in each case as at the end of such Collection Period.
"GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
"General Partner" means CURO Canada Receivables II GP Inc. and any successor or permitted assignee thereof.
"Governmental Authority" means the government of the U.S., Canada, any other nation or any political subdivision thereof, whether state, provincial, territorial, or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
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"Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all guarantees by such Person of Indebtedness of others, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guarantee, (i) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances and (j) obligations in respect of any earn-out obligation for which the payment amount is capable of being determined or for which the obligation is evidenced by a promissory or similar instrument. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
"Industry Regulatory Action" means any inquiry, investigation, legal action or proceeding by any Governmental Authority alleging any noncompliance by any member of the consumer credit industry with such jurisdiction's applicable consumer credit laws or insurance laws as a result of a method, practice, action, inaction, condition, event or circumstance that is consistent in all material respects with the same or any similar method, practice, action, inaction, condition, event or circumstance engaged in by or applicable to any CURO Group Party or any third party engaged by any CURO Group Party.
"Initial Servicers" means CURO Canada Corp. and LendDirect Corp. (Canada) and "Initial Servicer" means either of them.
"Insolvency Event" means the occurrence of any of the following:
| (a) | a Purchaser Party or a Seller Party shall: |
| (i) | apply for or consent to the appointment of, or the taking of possession by a receiver, interim receiver, receiver and manager, monitor, custodian, administrator, trustee, liquidator or other similar official for itself or any other Purchaser Party or Seller Party or for all or any substantial part of its or any other Purchaser Party's or Seller Party's assets; |
| (ii) | commit an act of bankruptcy; |
| (iii) | make a general assignment for the benefit of creditors, or otherwise commence or consent to the commencement of proceedings under the Bankruptcy and Insolvency Act (Canada) (including proceedings in connection with any proposal or notice of intention to make a proposal thereunder), the Companies' Creditors Arrangement Act (Canada) or under any other Insolvency Law, or consent to any orders sought in any such proceedings, in each case in respect of any Purchaser Party, Seller Party or any of their respective property; |
| (iv) | take any corporate or partnership action to authorize, or expressly state any intention to take, any of the actions described in (i) through (iii) above; or |
| (v) | (A) be unable to meet its obligations as they generally become due, (B) cease paying its current obligations in the ordinary course of business as they generally become due, (C) cease to have property that, at a fair valuation, is sufficient, or, if disposed of at a fairly conducted sale under legal process, would be sufficient to enable payment of all of its obligations, due and accruing due, or (D) admit in writing that any of (A) through (C) have occurred in respect of any Purchaser Party or Seller Party; |
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| (b) | a receiver, interim receiver, receiver and manager, monitor, custodian, administrator, trustee, liquidator or other similar official is appointed over a Purchaser Party or Seller Party or over all or any substantial part of a Purchaser Party's or a Seller Party's assets; or |
| (c) | in respect of any Purchaser Party or Seller Party, an involuntary proceeding shall be commenced seeking: (A) to adjudicate any Purchaser Party or Seller Party a bankrupt or insolvent; (B) relief in respect of any Purchaser Party or Seller Party or a substantial part of such Purchaser Party's or Seller Party's assets under the Bankruptcy and Insolvency Act (Canada) (including proceedings in connection with any proposal thereunder), the Companies' Creditors Arrangement Act (Canada) or any other Insolvency Law; or (C) the appointment of a receiver, trustee, custodian, liquidator or similar official for any Purchaser Party or Seller Party or any substantial part of such Purchaser Party's or Seller Party's property. |
"Insolvency Law" means the Companies' Creditors Arrangement Act (Canada), Bankruptcy and Insolvency Act (Canada), Winding-up and Restructuring Act (Canada), the Limited Partnerships Act (Ontario) and all other winding-up, liquidation, dissolution, conservatorship, bankruptcy, moratorium, protection, composition, arrangement, receivership, insolvency, reorganization, or similar laws of Canada or other applicable jurisdictions, including at common law or equity, from time to time in effect and affecting the rights of creditors generally.
"Insolvent" means, in respect of any Person:
| (a) | such Person: |
| (i) | applies for or consents to the appointment of, or the taking of possession by a receiver, interim receiver, receiver and manager, monitor, custodian, administrator, trustee, liquidator or other similar official over such Person or all or any substantial part of such Person's assets; |
| (ii) | commits an act of bankruptcy; |
| (iii) | makes a general assignment for the benefit of creditors, or otherwise commences or consents to the commencement of proceedings under the Bankruptcy and Insolvency Act (Canada) (including proceedings in connection with any proposal or notice of intention to make a proposal thereunder), the Companies' Creditors Arrangement Act (Canada) or under any other Insolvency Law, or consents to any orders sought in any such proceedings, in each case in respect of such Person or such Person's property; |
| (iv) | takes any corporate or partnership action to authorize, or expressly states any intention to take, any of the actions described in (i) through (iii) above; or |
| (v) | (A) is unable to meet such Person's obligations as they generally become due, (B) ceases paying such Person's current obligations in the ordinary course of business as they generally become due, (C) ceases to have property that, at a fair valuation, is sufficient, or, if disposed of at a fairly conducted sale under legal process, would be sufficient to enable payment of all of such Person's obligations, due and accruing due, or (D) admits in writing that any of (A) through (C) have occurred in respect of such Person; |
| (b) | a receiver, interim receiver, receiver and manager, monitor, custodian, administrator, trustee, liquidator or other similar official is appointed over such Person or over all or any substantial part of such Person's assets; |
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| (c) | an involuntary proceeding shall be commenced seeking: (i) to adjudicate such Person a bankrupt or insolvent; (ii) relief in respect of such Person or a substantial part of such Person's assets under the Bankruptcy and Insolvency Act (Canada) (including proceedings in connection with any proposal thereunder), the Companies' Creditors Arrangement Act (Canada) or any other Insolvency Law; or (iii) the appointment of a receiver, interim receiver, receiver and manager, monitor, trustee, custodian, liquidator or similar official for such Person or any substantial part of such Person's property; or |
| (d) | security enforcement, sale or foreclosure steps shall have been taken against such Person or a substantial part of such Person's property under the PPSA or similar laws of any other jurisdiction. |
"Insurance" means, collectively, the insurance made available to Obligors by Insurers with respect to Receivables under the Master Insurance Contracts.
"Insurance Cost Yield" means, at any time, in respect of a Collection Period, the ratio (expressed as a percentage) computed by dividing (i) the Insurance Cost during such Collection Period by (ii) the Aggregate Outstanding Balance of all Purchased Receivables as of the last day of such Collection Period.
"Insurance Costs" means, collectively, the amounts paid or required to be paid by the Purchaser to any Insurer out of Insurance premiums received from Obligors in accordance with any Master Insurance Contracts entered into by the Sellers, and "Insurance Cost" means any of such amounts.
"Insurers" means Canadian Premier Life Insurance Company and any other insurer that provides Insurance pursuant to the Master Insurance Contracts, to the extent permitted under the Transaction Documents, and "Insurer" means any of them.
"Intercompany Debt" means any Indebtedness from time to time owing by any Seller to any Affiliate thereof.
"Intercreditor Agreement" means the intercreditor agreement dated May 12, 2023 among, amongst others, the Securitization Entity, Waterfall Asset Management, LLC, WF Marlie 2018-1 Ltd., the Purchaser, the General Partner, CURO Canada Receivables Limited Partnership, by its general partner, CURO Canada Receivables GP Inc., CURO Canada Corp. and LendDirect Corp.
"Interest Rate Caps" means the interest rate cap transaction in which the Purchaser as buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike rate, and "Interest Rate Cap" means any such transaction.
"ITA" means the Income Tax Act (Canada).
"Level 1 Collateral Trigger" means, in respect of any Collection Period, the occurrence of any of:
| (a) | a Default Ratio of greater than [* * * * *]; |
| (b) | a Delinquency Ratio of greater than [* * * * *]; |
| (c) | a Payment Ratio of less than [* * * * *]; or |
| (d) | an Excess Spread Percentage of less than [* * * * *]. |
"Level 2 Collateral Trigger" means, in respect of any Collection Period, the occurrence of any of:
| (a) | a Default Ratio of greater than [* * * * *]; |
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| (b) | a Delinquency Ratio of greater than [* * * * *]; |
| (c) | a Payment Ratio of less than [* * * * *]; or |
| (d) | an Excess Spread Percentage of less than [* * * * *]. |
"Level 2 Regulatory Trigger Event" means (a) the failure of a Regulatory Action by any Canadian Governmental Authority to be released or terminated in a manner acceptable to the Securitization Entity, acting reasonably, within [* * * * *] of the commencement thereof, but excluding any Regulatory Action that has been inactive for at least [* * * * *] (to the satisfaction of the Securitization Entity) including, for the avoidance of doubt, as a result of a change in the scope or nature of activities undertaken by the Purchaser, or (b) the issuance or entering by any Governmental Authority pursuant to an Industry Regulatory Action of any cease and desist order, permanent injunction, temporary restraining order, or other judicial or non-judicial sanction, order or ruling restricting the origination, marketing, servicing or enforcement of consumer loans substantially similar to the Receivables, which has or could reasonably be expected to have a Material Adverse Effect, as determined by the Securitization Entity in its Permitted Discretion.
"Level 3 Collateral Trigger" means the occurrence, in respect of any Collection Period, of any of:
| (a) | a Default Ratio of greater than [* * * * *]; |
| (b) | a Delinquency Ratio of greater than [* * * * *]; |
| (c) | a Payment Ratio of less than [* * * * *]; or |
| (d) | an Excess Spread Percentage of less than [* * * * *]. |
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothec (whether legal or conventional), hypothecation, encumbrance, charge, option or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
"Line of Credit Loan Receivables" means, collectively, the line of credit loans described in the related Underlying Agreements as personal loan agreements for lines of credit, and "Line of Credit Loan Receivable" means any one of them.
"Master Insurance Contracts" means, collectively, the Master Insurance Policies and the Master Insurance Marketing Agreement, and "Master Insurance Contract" means any of them.
"Master Insurance Marketing Agreement" means the lender marketing agreement for group creditor insurance plan between Canadian Premier Life Insurance Company, Premium Services Group Inc., LendDirect Corp. and CURO Canada Corp. (formerly, Cash Money Cheque Cashing Inc.) dated March 8, 2018, as amended, replaced or supplemented, from time to time to the extent permitted under the Transaction Documents.
"Master Insurance Policies" means, collectively, the following master insurance policies:
| (a) | policy number LOC001-CM01 between Canadian Premier Life Insurance Company and CURO Canada Corp. (formerly, Cash Money Cheque Cashing Inc.); |
| (b) | policy number LOC001-LD01 between Canadian Premier Life Insurance Company and LendDirect Corp. (formerly, Cash Money Cheque Cashing Inc.); |
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| (c) | policy number ST001-CM01 between Canadian Premier Life Insurance Company and CURO Canada Corp. (formerly, Cash Money Cheque Cashing Inc.); and |
| (d) | policy number ST001-LD001 between Canadian Premier Life Insurance Company and LendDirect Corp.; |
in each case, as amended, replaced or supplemented, from time to time to the extent permitted under the Transaction Documents, and "Master Insurance Policy" means any of them.
"Material Adverse Effect" means a material adverse effect on (a) the business, assets, operations, prospects or condition, financial or otherwise of any of (i) the CURO Group Parties taken as a whole, (ii) any of the Purchaser Parties, (iii) any of the Sellers, or (iv) any of the Servicers, (b) the ability of any of the CURO Group Parties to perform any of its obligations under any of the Transaction Documents to which it is a party, (c) a material portion of the Purchaser Party Assets, the Securitization Entity's Liens (on behalf of itself and other Secured Parties) on the Purchaser Party Assets or the priority of such Liens, or (d) the rights of or benefits available to the Securitization Entity or any other Person providing financing under any of the Transaction Documents.
"Maturity Date" means the "Maturity Date" arising under any credit agreement to which the Purchaser is a party.
"Modified Contract" means, with respect to a Receivable, the related Underlying Agreement (i) was in default and which default was cured by adjusting or amending the terms of such Underlying Agreement or accepting a reduced payment, or (ii) was amended or otherwise modified at any time to reduce the interest rate, extend the original term, reduce, or change the frequency of, the payments, or extend the scheduled payment dates or reduce the principal balance.
"Monthly Settlement Date" means the first Weekly Settlement Date of each calendar month.
"Obligor" means, with respect to any Receivable, the Person or Persons obliged to make payments in respect thereof.
"Online Receivables" means all Receivables which were originated by the Sellers through an online platform in accordance with the applicable Requirements of Law.
"Organizational Documents" of any Person means its memorandum and articles of association, articles or certificate of incorporation or formation and by-laws, limited liability agreement, partnership agreement, declaration of trust or other comparable charter or organizational documents as amended from time to time and shall include with respect to the Purchaser, the Partnership Agreement.
"Outstanding Balance" means, with respect to any Receivable at any time, the outstanding balance, which remains unpaid and owing from the relevant Obligor at such time, excluding any amount payable on account of fees, commissions, finance charges, late payment charges and other similar items.
"Partnership Agreement" means the limited partnership agreement in respect of the Purchaser dated as of April 17, 2023.
"Payment Ratio" means, at any time, the weighted average (expressed as a percentage) of the ratios computed for each of the two immediately preceding Collection Periods by dividing, in respect of each such Collection Period, (a) the total Collections received in the Transaction Account as of the last day of such Collection Period by (b) the Aggregate Outstanding Balance of all Purchased Receivables as at the end of such day.
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"Pending Eligible Receivables" means Receivables that would be Eligible Receivables but for the fact that the first scheduled payment of the relevant Obligor pursuant to the related Underlying Agreement is pending.
"Permitted Discretion" means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.
"Permitted Encumbrances" means, with respect to any Person or its assets, (a) any inchoate Liens for current taxes, assessments, levies, fees and other government and similar charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been established in accordance with GAAP, but only so long as foreclosure, execution or garnishment with respect to such Lien is not imminent and the use and value of the property to which the liens attach are not impaired during the pendency of such proceedings, (b) with respect to CURO Canada Corp. and LendDirect Corp., any Lien in favour of the secured parties under or pursuant to that certain second amended and restated asset-backed revolving credit agreement dated as of November 12, 2021 made between, amongst others, CURO Canada Receivables Limited Partnership, as Borrower, and Waterfall Asset Management, LLC, as administrative agent, as amended, modified, supplemented, restated or replaced from time to time, and the Transaction Documents defined therein, provided that such Lien or Liens have been released by such secured parties in respect of any Purchased Assets sold pursuant to this Agreement effective as of the date and time that such Purchased Assets are sold to the Purchaser and, for the avoidance of doubt, shall not be considered to be a Permitted Encumbrance in respect of any Purchased Assets upon their Purchase, (c) any Lien in favour of, or assigned to, the Securitization Entity (for the benefit of the Secured Parties) under the Transaction Documents, and (d) any other Lien which the Securitization Entity has consented to in writing, and, for the avoidance of doubt, Liens arising under ERISA are not Permitted Encumbrances.
"Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
"Portfolio Limits" means, in respect of the Purchased Receivables, the following limits: [* * * * *].
"Portfolio Yield" means, at any time in respect of a Collection Period, a percentage equal to (i) the total non-principal Collections (including Insurance premiums) received from Obligors into the Transaction Account as of the last day of such Collection Period, divided by (ii) the Aggregate Outstanding Balance of all Purchased Receivables as of the last day of such Collection Period, multiplied by (iii) 12.
"PPSA" means the Personal Property Security Act (Ontario), including the regulations thereto and related Minister's Orders, provided that if perfection or the effect of perfection or non-perfection or the priority of any Lien created hereunder or under any other document on the Purchaser Party Assets is governed by the personal property security legislation or other applicable legislation with respect to personal property security in effect in any applicable jurisdiction in Canada, "PPSA" means the Personal Property Security Act or such other applicable legislation (including, the Civil Code of Quebec) in effect from time to time in such other jurisdiction in Canada for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
"Principal Balance" means, with respect to a Receivable, the outstanding principal balance owing on such Receivable.
"Privacy Laws" means PIPEDA and any regulations thereunder, as amended, replaced or supplemented from time to time, and any other similar applicable federal, provincial or territorial legislation now in force or that may in the future come into force in Canada governing the protection of personal information in the private sector.
"Purchase" means each purchase by the Purchaser of Purchased Receivables hereunder and a Purchase Notice.
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"Purchase Date" means, in respect of each Purchase, the date specified as such in the Purchase Notice applicable to such Purchase.
"Purchase Notice" means an offer by the Sellers to sell assets to the Purchaser in the form attached as Schedule A hereto.
"Purchased Assets" means the Receivables purchased by the Purchaser hereunder (other than those repurchased by the Sellers), the Related Rights thereto and the related Collections.
"Purchased Receivables" means Eligible Receivables and Pending Eligible Receivables that are purchased pursuant to this Agreement.
"Purchaser" means CURO Canada Receivables II Limited Partnership.
"Purchaser Parties" means, collectively, the General Partner and the Purchaser, and "Purchaser Party" means either of them.
"Purchaser Party Assets" means any and all property owned, leased or operated by a Purchaser Party and any and all other property of the Purchaser, now existing or hereafter acquired.
"Receivables" means the indebtedness and other obligations originally owed to CURO Canada Corp. and LendDirect Corp. (Canada) in connection with any and all liens, installment sale agreements, instruments, consumer finance paper and/or promissory notes securing and evidencing unsecured multi-pay consumer line of credit and installment loans made and/or acquired by CURO Canada Corp. or LendDirect Corp. (Canada), as the case may be, which were originated in accordance with the Credit and Collection Policies or which are otherwise included as Purchaser Party Assets.
"Receivables Sale Termination Notice" means a notice from the Purchaser that it will cease purchasing Receivables hereunder.
"Records" means, at any time in relation to a Seller and with respect to any Receivable, all contracts and other documents, records and other information (including, without limitation, computer programs, tapes, disks, data processing software and related property and rights) relating to such Receivables, any Related Rights and the related Obligor, in each case, related to such Seller, which are reasonably necessary, in light of the circumstances then subsisting, to service or enforce such Receivable and Related Rights.
"Regulatory Action" means, other than a Routine Inquiry, any inquiry, investigation, legal action or proceeding by any Governmental Authority alleging any noncompliance by any CURO Group Party or, to the knowledge of the Purchaser or any other CURO Entity, any third party engaged by a CURO Group Party with such jurisdiction's applicable consumer credit laws or insurance laws, which, if adversely determined, could reasonably be expected to have a Material Adverse Effect as determined by the Securitization Entity in its Permitted Discretion.
"Related Rights" means, in respect of any Receivable:
| (a) | all Liens and property securing or attaching to such Receivable from time to time, if any, purporting to secure payment of such Receivable or otherwise, together with any and all security documents describing any assets securing such Receivable; |
| (b) | all deposits, insurance, guarantees, letters of credit, indemnities, warranties and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Underlying Agreement for such Receivable or otherwise; |
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| (c) | all rights to receive and obtain payment under the Underlying Agreement for such Receivable including rights of enforcement under the Underlying Agreement against the relevant Obligor; |
| (d) | all Records related to such Receivable; |
| (e) | all rights to enforce payment under the Underlying Agreement against the relevant Obligor and all rights to demand, sue for, recover, receive and give receipt for all such amounts; |
| (f) | all Collections and any other proceeds (including the proceeds of any sale or disposal) related to such Receivable; and |
| (g) | all proceeds of any of the foregoing. |
"Replacement Servicer Fee" has the meaning assigned to such term in Section 7.03.
"Reporting Date" means the tenth (10th) calendar day of each month (or, if such day is not a Business Day, the first Business Day to occur thereafter).
"Requirements of Law" means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person and (b) any statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
"Revolving Period" means the period from the Closing Date until the Revolving Period End Date
"Revolving Period End Date" means the earliest of (i) the Maturity Date, (ii) the occurrence of an Amortization Event or (iii) the occurrence of an Event of Default.
"Routine Inquiry" includes, without limitation, any inquiry, written or otherwise, made by a Governmental Authority via a form letter or otherwise which does not contain any specific allegations or violations, other than in connection with the routine transmittal of a consumer complaint.
"Sanctioned Country" means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba (but not with respect to Canada or to the Purchaser), Iran, North Korea, Sudan, and Syria, Kherson, Zaporizhzhia regions of Ukraine, the so-called Donetsk People's Republic, and the so-called Luhansk People's Republic).
"Sanctioned Person" means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the Government of Canada, the Government of any Province or territory of Canada or by the United Nations Security Council, the European Union or any EU member state, Her Majesty's Treasury of 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 (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, or (b) the United Nations Security Council, the Government of Canada, the European Union, any EU member state, Her Majesty's Treasury of the United Kingdom or other relevant sanctions authority.
"Secured Parties" means (a) the Securitization Entity, (b) any Person providing financing under the Securitization Documents, (c) the Back-up Servicer, (d) the Verification Agent, (e) the beneficiaries of each indemnification obligation undertaken by the Purchaser under any Transaction Document, and (f) the successors and assigns of each of the foregoing.
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"Securitization Documents" means, collectively, any credit agreement, promissory notes issued pursuant to such credit agreement, security agreement, deposit account control agreements, blocked account control agreements, securities account control agreements, fee letter, guaranty and all other agreements, instruments, documents and certificates identified in such credit agreement executed and delivered to, or in favour of, the Securitization Entity or any other party providing financing thereunder and including intercreditor agreements (including the Intercreditor Agreement), subordination agreements and all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any CURO Group Party, or any employee of any CURO Group Party, and delivered to the Securitization Entity or any other party providing financing thereunder in connection with such credit agreement or the transactions contemplated thereby. Any reference in this Agreement to a Securitization Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to such Securitization Document as the same may be in effect at any and all times such reference becomes operative.
"Securitization Entity" means Midtown Madison Management LLC, as investment manager on behalf of one or more investment management clients, in its capacity as administrative agent under any Securitization Document.
"Security Interest" means any Lien granted to the Securitization Entity.
"Seller Collections Account Bank" means the Royal Bank of Canada, [* * * * *].
"Seller Collections Accounts" means the accounts of the Sellers into which Collections are received from Obligors or transferred from other Seller accounts.
"Seller Collections Accounts Blocked Account Agreement" means the blocked account agreement to be entered into among the Seller Collections Account Bank, the Sellers, Waterfall Asset Management, LLC and the Securitization Entity.
"Seller Parties" means, collectively, the Sellers and the Initial Servicers, and "Seller Party" means any one of them.
"Sellers" means each of CURO Canada Corp. and LendDirect Corp. (Canada) and "Seller" means either of them.
"Sellers Security Agreement" means that certain security agreement (including any and all supplements thereto), dated as of the Effective Date, among the Sellers and the Purchaser, for the benefit of the Purchaser, and any other pledge or security agreement governed by the laws of a province or territory of Canada entered into, after the date of this Agreement by the Sellers (as required by this Agreement or any other Transaction Document) or any other Person for the benefit of the Purchaser, as the same may be amended, restated, supplemented or otherwise modified from time to time.
"Servicer Termination Event" has the meaning assigned to such term in Section 7.01.
"Servicers" means, collectively, (i) as at the Closing Date, the Initial Servicers or (ii) each successor or replacement Servicer as may be appointed pursuant to the Transaction Documents, and "Servicer" means any one of them.
"Servicing Cost" means, as of any date of determination, an annualized percentage, calculated with reference to the Aggregate Eligible Pool Balance and the related Collection Period, equal to the monthly ratio of (a) the sum of all Replacement Servicer Fees and all collection fees during each such Collection Period divided by (b) the Aggregate Outstanding Balance of all Purchased Receivables as of the last day of the immediately preceding Collection Period, provided that the Servicing Cost shall not be less than 3.5%.
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"Servicing Report" means the servicing report prepared by the Servicers in the form attached as Schedule C hereto.
"Subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
"Taxes" means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), value added taxes, or any other goods and services, use or sales taxes, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax, fines or penalties applicable thereto.
"Transaction Account" means the account of the Purchaser with account number [* * * * *], transit number [* * * * *], held with the Transaction Account Bank.
"Transaction Account Bank" means the Royal Bank of Canada, [* * * * *].
"Transaction Account Blocked Account Agreement" means the blocked account agreement to be entered into between the Transaction Account Bank, the Purchaser and the Securitization Entity in respect of the Transaction Account.
"Transaction Documents" means each Securitization Document, each Interest Rate Cap, the Back-up Servicing and Verification Agency Agreement (from and after the delivery thereof), the Sellers Security Agreement, the Seller Collections Accounts Blocked Account Agreement (from and after the delivery thereof) and this Agreement.
"Underlying Agreements" means, collectively, any agreements with an Obligor (including any modifying agreements supplemental thereto) from which any Receivable derives and any related documents, and "Underlying Agreement" means any one of them.
"USA PATRIOT Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
"Verification Agent" means SST Office Services Inc. and any successor thereto pursuant to the terms hereof.
"Weekly Settlement Date" means every Thursday of each calendar week, provided that if such day is not a Business Day, the Weekly Settlement Date shall be the following Business Day.
"Weighted Average Portfolio Interest Rate" means, at any time in respect of a Collection Period, a percentage equal to the quotient of (i) the sum of the product of the (A) the principal balance as at end of such Collection Period of each Eligible Receivable included in the Aggregate Eligible Pool Balance as at the end of such Collection Period and (B) the annual interest rate on such Eligible Receivable included in the Aggregate Eligible Pool Balance, divided by (ii) the sum of the principal balances as at the end of such Collection Period of all Eligible Receivables included in the Aggregate Eligible Pool Balance.
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Section 1.02 Interpretation.
(a) 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 "law" shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply) and all judgments, orders and decrees of all Governmental Authorities. The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person's successors and assigns (subject to any restrictions on assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in any definition to the phrase "at any time" or "for any period" shall refer to the same time or period for all calculations or determinations within such definition, (g) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (h) unless otherwise provided herein, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and each of the words "to" and "until" means "to but excluding".
(b) Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time. 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 any election under Accounting Standards Codification Section 825-10 (or any other financial accounting standard having a similar result or effect) to value any Indebtedness or other liabilities of the Purchaser at "fair value", as defined therein.
(c) Where any reference is made in this Agreement or any other agreement, document or instrument executed pursuant hereto or contemplated hereby to which the Purchaser is a party to an act or covenant to be performed by the Purchaser, such reference shall be construed and applied for all purposes as if it referred to an act or covenant to be performed by the General Partner acting in its capacity as general partner of the Purchaser and for and on behalf of the Purchaser.
Section 1.03 Non-Business Days.
Whenever any payment to be made hereunder shall be stated to be due, any period of time would begin or end, any calculation is to be made or any other action to be taken hereunder shall be stated to be required to be taken, on a day other than a Business Day, such payment shall be made, such period of time shall begin or end, such calculations shall be made and such other action shall be taken on the next succeeding Business Day.
Section 1.04 Currency.
Unless otherwise provided, all amounts herein are stated in Canadian Dollars.
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Section 1.05 Schedules.
The following schedules annexed hereto are incorporated herein by reference and are deemed to be part hereof:
Schedule A - Form of Purchase Notice
Schedule B - Sellers' and Servicers' Addresses
Schedule C - Forms of Servicing Report
Schedule D - Credit and Collection Policies
Article II
PURCHASE AND SALE OF LOANS
Section 2.01 Purchases and Sales of Purchased Assets pursuant to Purchase Notices.
(a) Upon the terms and subject to the conditions set forth herein, no more than one (1) time per calendar week, the Sellers may, on any Business Day prior to receipt of a Receivables Sale Termination Notice, deliver a completed Purchase Notice to the Purchaser requiring the Purchaser to purchase Eligible Receivables and Pending Eligible Receivables as well as the Related Rights and relevant Collections from the Sellers either (i) on the Thursday of any week, provided that if such day is not a Business Day, it shall be the next succeeding Business Day or (ii) on the third Business Day which follows the delivery of any Purchase Notice.
(b) Subject to the satisfaction of the conditions precedent set forth in Article VIII hereof, on the Purchase Date specified in each Purchase Notice, the Purchaser shall purchase from the Sellers, and the Sellers shall sell, transfer and assign to the Purchaser, as of and from the applicable Cut-Off Date, all of the Sellers' right, title and interest in and to the Purchased Assets identified in the Purchase Notice. The single purchase price for the applicable Purchased Assets shall be the fair market value of such Purchased Assets and composed of two elements: (i) an immediate cash payment to the Sellers in the amount of the applicable Closing Payment; and (ii) a deferred amount equal to the difference between the fair market value of such Purchased Assets and the Closing Payment which shall be payable to the Sellers (as deferred purchase price).
(c) Subject to the conditions set forth in Article VIII, during the Revolving Period, the Sellers hereby agree to sell, transfer, assign, set over and convey to the Purchaser, in accordance with the terms hereof (i) all Eligible Receivables and (ii) any Pending Eligible Receivables, originated by the Sellers.
(d) Each Purchase contemplated in Section 2.01(a) shall be effective immediately upon the payment by the Purchaser to the Sellers of the applicable Closing Payment as set out in the relevant Purchase Notice, and following the completion of each such sale, transfer and assignment, all Collections paid and payable with respect to the applicable Purchased Assets from and after the applicable Cut-Off Date will be the property of the Purchaser and will be deposited to the Transaction Account in accordance with Section 6.03.
(e) In respect of any Purchase and the related sale, assignment and/or transfer of the relevant Related Rights, all of the Sellers' right, title and interest in the relevant Insurance and the Master Insurance Policies and all moneys which may at any time be or become payable thereunder or in connection therewith or be derived therefrom, including, without limitation, income, bonuses, additions, profits, payments, distributions, withdrawals, proceeds and other increments and any interest thereon together with all moneys otherwise held or accumulated in connection with or for the purposes of the Master Insurance Policies with full and irrevocable power to recover, receive and grant receipts for all or any of such moneys and to surrender, assign and otherwise dispose of or deal with the same shall be assigned to the Purchaser on the Purchase Date.
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Section 2.02 Disqualified Receivables.
If at any time after the applicable Purchase Date any Seller discovers or receives written notice from the Purchaser that an eligibility requirement contained in the definition of "Eligible Receivables" or, to the extent that any Receivable is affected by such breach, any representation or warranty given under Section 3.01(nn) by the Sellers and the Servicers was not satisfied with respect to any Receivable on the related Cut-Off Date and the relevant Purchase Date, the relevant Seller shall pay to the Purchaser by deposit to the Transaction Account by no later than the immediately following Business Day an amount equal to the Outstanding Balance of such Receivable plus accrued interest thereunder. Upon the payment of such amount to the Purchaser, the Purchased Assets related to such Receivable will be hereby sold by the Purchaser to the relevant Seller without any representation or warranty (whether express, implied, statutory or otherwise) by or on behalf of the Purchaser. Upon payment of such amount, any incorrectness in any representation or warranty related to such Receivable shall be deemed to have been rectified. The amount deposited to the Transaction Account shall be a Deemed Collection hereunder.
Article III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Sellers and the Servicers on each Purchase Date.
The Sellers and the Servicers, on a joint and several basis, represent and warrant to the Purchaser as of the date of this Agreement, on each Reporting Date and on each Purchase Date (except as otherwise specified below) that:
(a) it is duly incorporated and validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all necessary power, capacity and authority to (i) carry on its business as presently carried on by it and (ii) execute and deliver each Transaction Document to which it is a party and to perform its obligations thereunder;
(b) it has not used any legal names, trade names or assumed names other than the name in which it has executed this Agreement;
(c) the execution and delivery by it of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations under this Agreement or thereunder:
| (i) | are within its organizational powers and have been duly authorized by its Organizational Documents; |
| (ii) | will not require any authorization, consent, approval, order, filing, registration or qualification by or with any Governmental Authority, except those that have been obtained and are in full force and effect; |
| (iii) | do not violate any provision of (i) any Applicable Law or of any order, writ, injunction or decree presently in effect having applicability to it save to the extent that any violation has not had and could not reasonably be expected to have a Material Adverse Effect; or (ii) its Organizational Documents; |
| (iv) | will not contravene or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which it is a party or by which it may be bound or affected; and |
| (v) | will not result in, or require, the creation or imposition of any Lien or other charge or encumbrance of any nature upon or with respect to any of the assets now owned or hereafter acquired by it, in each case, other than pursuant to the Transaction Documents. |
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(d) this Agreement and each of the other Transaction Documents to which it is a party have been duly authorized, executed and delivered by it;
(e) this Agreement has been duly executed and delivered by the General Partner on behalf of the Purchaser, in its capacity as general partner of the Purchaser and in its own capacity;
(f) each Transaction Document to which it is a party constitutes (or will, when executed and delivered constitute) its legal, valid and binding obligation enforceable against it in accordance with its terms, subject only to the discretion that a court may exercise in granting equitable remedies and any limitation under laws relating to bankruptcy, insolvency, moratorium, fraudulent preference, reorganization or other laws affecting creditors' rights generally from time to time in effect;
(g) each Seller Party has complied with all Applicable Laws except to the extent that non-compliance does not have or could not reasonably be expected to have a Material Adverse Effect;
(h) there are no actions, suits, investigations, litigation or proceedings at law or in equity or by or before any Governmental Authority, in arbitration now commenced, or to the best of its knowledge, pending or threatened against or affecting any Seller Party which has not previously been disclosed by such Person to (and waived in writing by) the Purchaser and that:
| (i) | asserts the invalidity of this Agreement or any other Transaction Document; |
| (ii) | seeks to prevent the grant of a security interest in any Purchaser Party Assets by the Purchaser, the ownership or acquisition by the Purchaser of any Eligible Receivables or other Purchaser Party Assets or the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document; or |
| (iii) | could otherwise (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect if determined against such Person. |
(i) (i) no Insolvency Event has occurred in respect of any Seller Party and no step has been taken or is intended to be taken by it or, to the best of its knowledge and belief, by any other Person that would constitute an Insolvency Event in respect of such Person and (ii) giving effect to the transactions contemplated by this Agreement and the other Transaction Documents will not cause an Insolvency Event with respect to any Seller Party to occur;
(j) with respect to each Receivable sold or contributed to the Purchaser, the Purchaser has given reasonably equivalent value to the Sellers in consideration therefor and such transfer was not made for or on account of an antecedent debt;
(k) there has been no Material Adverse Effect that is continuing on the ability of the Servicers to service and collect the Collections with respect to the Receivables;
(l) no transfer by the Sellers of any Receivable to the Purchaser under this Agreement is or may be voidable under any section of any Insolvency Law or otherwise (including, for the avoidance of doubt, under any assignments for the benefit of creditors, preferences and fraudulent conveyances laws of Canada or any Province therein or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally);
(m) assuming the filing of the financing statements or other similar instruments or documents necessary under the PPSA approved by it on the Closing Date, this Agreement, together with the applicable Purchase Notice and such financing statements or documents, effects a valid and perfected assignment of the relevant Receivables described in such Purchase Notice to the Purchaser, free and clear of any Lien except for Permitted Encumbrances;
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(n) prior to any Purchase, the Sellers are the legal and beneficial owners of each Receivable sold or contributed to the Purchaser pursuant to such Purchase free and clear of any Lien except for Permitted Encumbrances;
(o) following any Purchase, the Purchaser will be the legal and beneficial owner of each Receivable sold or contributed to it pursuant to such Purchase free and clear of any Lien except for Permitted Encumbrances;
(p) its principal place of business, chief executive office and registered office are located at the addresses set forth under its name on the signature pages hereto and the offices where it keeps all Records held by it are located at the addresses set out in Schedule B hereto or such other addresses as the Sellers shall from time to time notify the Purchaser;
(q) the Transaction Account constitutes an "Intangible" within the meaning of the PPSA and the Purchaser or the General Partner, as applicable, has good and marketable title to the Transaction Account, free and clear of any Lien;
(r) each of the Seller Collections Accounts constitutes an "Intangible" within the meaning of the PPSA and the Sellers have good and marketable title to the Seller Collections Accounts, free and clear of any Lien;
(s) [Reserved.];
(t) the Purchaser has not granted any Person (other than its lenders, the Servicers and their respective assigns) access to or control of the Transaction Account held in its name, or the right to take dominion and control of the Transaction Account at a future time or upon the occurrence of a future event;
(u) the Sellers have not granted any Person (other than its lenders, the Servicers and their respective assigns) access to or control of the Seller Collections Accounts held in their name, or the right to take dominion and control of the Seller Collections Accounts at a future time or upon the occurrence of a future event;
(v) save to the extent previously disclosed in writing, no event has occurred and is continuing and no condition exists, that constitutes or may reasonably be expected to constitute a Servicer Termination Event, a Collateral Trigger Event, a Level 2 Regulatory Trigger Event, an Amortization Event or an Event of Default;
(w) any written information furnished by it pursuant to the Transaction Documents including each Purchase Notice and any information relating to the Receivables and all information set out in each Servicing Report (the "Information") is true and correct in all material respects as of its date and no such Information contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not materially misleading;
(x) it is not a non-resident of Canada within the meaning of the ITA and has timely (taking into account any extensions) (i) filed all tax returns (federal, provincial, state, foreign and local) required to be filed by it and (ii) paid, or caused to be paid, all Taxes, assessments and other governmental charges, if any, other than Taxes, assessments and other governmental charges being contested in good faith by appropriate proceedings and as to which adequate reserves have been provided in accordance with GAAP;
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(y) no transaction contemplated by any Transaction Document will require compliance by it with any bulk sales act or similar law;
(z) it (A) is not a Sanctioned Person, (B) has no assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person, or (C) does not do business in or with, or derive any of its operating income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any law or directive enforced by any sanctions authority;
(aa) none of (i) the Seller Parties, nor any of their directors or officers or (ii) to the knowledge of the Purchaser Parties, any employee, Affiliate or agent of the Seller Parties, is a Sanctioned Person;
(bb) each Seller Party:
| (i) | is not in violation in any material respect of any Anti-Terrorism Law and does not engage in or conspire to engage in any material respect in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law; |
| (ii) | is not a Blocked Person; and/or |
| (iii) | does not (A) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (B) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224; |
(cc) each Seller Party has implemented and maintains in effect policies and procedures designed to ensure its compliance and the compliance of its respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions and it and its respective officers and directors and, to its knowledge, its employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in it being designated as a Sanctioned Person;
(dd) to the best of its knowledge, no event has occurred that has had a Material Adverse Effect which has not previously been disclosed by such Person in writing;
(ee) it possesses all material consents, authorizations, approvals, orders, licenses, franchises, permits, certificates and accreditations and all other appropriate regulatory authorities necessary to conduct its business, and the Sellers and the Servicers have not received any notice of proceedings relating to the revocation or modification of any such consents, authorizations, approvals, orders, licenses, franchises, permits, certificates or accreditations, and the Sellers are in compliance with all laws, rules, regulations and ordinances of all applicable Governmental Authorities, including, without limitation, all applicable provincial regulations and similar rules in the jurisdictions in which it operates, except to the extent that any such non-compliance would not reasonably be expected to have, either individually or in aggregate, a Material Adverse Effect;
(ff) no event, liability, development or circumstance has occurred or exists, or is contemplated to occur with respect to the Sellers or the Servicers or their business, properties, prospects, operations or financial condition, that would reasonably be expected to result, either individually or in aggregate, in a Material Adverse Effect;
(gg) it is in compliance with all Data Requirements, and, in particular, all consents necessary under Privacy Laws are in place to permit: (i) it to share such personal information with the Purchaser and each other Servicer, and (ii) the Purchaser and each other Servicer to use and disclose such personal information for the purposes intended hereby;
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(hh) it has not received from any Person or been required to give to any Person any notice, regarding any offense or alleged offense under Data Requirements, including any incident concerning or affecting Customer Data which gives rise to an obligation under Privacy Laws to notify a regulator;
(ii) it has not experienced loss or theft of any Customer Data, or accidental or unauthorised disclosure or access to Customer Data, including any unauthorized intrusions or security breaches of any IT asset which is owned or leased by it, in which Customer Data or other sensitive or confidential information (in each case, in its control or possession) was stolen or improperly accessed, used, or disclosed;
(jj) it has not received notice from any of its suppliers of IT assets that are not owned or leased by the it that any Customer Data, or other sensitive or confidential information (in each case, in its control or possession) was stolen or improperly accessed, used, or disclosed;
(kk) each of the Master Insurance Policies is a good, valid and subsisting insurance contract that has been fully paid up and in force and has not been forfeited, assigned (other than by the Sellers to the Purchaser pursuant to the terms of this Agreement and by the Purchaser by the granting of liens to its lenders in respect of all of its present and after-acquired personal property), terminated or otherwise disposed of or rendered void or voidable, and the Sellers have a good right and full power to assign the Master Insurance Policies hereunder;
(ll) each Seller's interest in each of the Master Insurance Contracts with respect to the Purchased Receivables originated by it is freely assignable by the relevant Seller to the Purchaser and all of the Purchaser's rights, title and interest therein is freely assignable by the Purchaser, in each case without any authorization, consent, approval, order, filing, registration or qualification by or with any Governmental Authority or any third party including any Insurer, except those that have been obtained and are in full force and effect;
(mm) no assignment of the Master Insurance Contracts or other disposal thereof in any way prejudicial to or inconsistent with the Security Interest or the Transaction Documents has been made as of the date hereof or will be made subsequent to the date hereof;
(nn) as to the Receivables generally:
| (i) | each Receivable identified as an Eligible Receivable in a Servicing Report or Purchase Notice that includes such Receivable was an Eligible Receivable with respect to its Purchase Date and the relevant Cut-off Date; |
| (ii) | the Sellers or the Servicers, as applicable, have full power, authorization, permits, licenses and other authority to hold, enforce, and make the loans (or other extensions of credit) evidenced by the Receivables and all such Receivables; |
| (iii) | all Records comprising such Receivables are genuine and enforceable; |
| (iv) | all Underlying Agreements in respect of Receivables have been duly authorized, executed, delivered by the parties whose names appear thereon and are valid and enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization or similar laws relating to the enforcement of creditors rights' or by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law, and consumer protection laws; |
| (v) | the form and content of all Underlying Agreements in respect of Receivables comply in all material respects (and in any event in all material respects necessary to maintain and ensure the validity and enforceability of the Receivables) with any and all Applicable Laws, rules and regulations; |
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| (vi) | the original amount and unpaid balance of each Receivable on the Sellers' or the Servicers' Records, including without limitation this Agreement, is and will be the true and correct amount actually owing to the Purchaser as of the Purchase Date for such Receivable and is not, to the best of each Seller's and each Servicer's knowledge, subject to any claim of reduction, counterclaim, set-off, recoupment or any other claim, allowance or adjustment; and no Seller or Servicer has any knowledge of any fact which would impair the validity or collectability of any Receivable; |
| (vii) | the Sellers have made an adequate credit investigation of the Obligor of each Receivable and has determined that his or her credit is satisfactory and meets the standards generally observed by prudent finance companies that are in the business of making unsecured multi-pay subprime consumer installment loans, and is in conformity in all material respects with the Credit and Collection Policies; |
| (viii) | the sale and transfer of the Receivables in accordance with the terms hereof shall be valid and free from all Taxes, Liens and charges with respect to the transfer thereof, enforceable against creditors of, and purchasers from, the relevant Seller, and upon receipt of the Receivables hereunder, the Purchaser will be vested with good and marketable title to the Purchased Assets related thereto, free and clear of all Taxes, Liens and charges with respect to the transfer thereof and shall be able to enforce the Receivables in accordance with their terms; and |
| (ix) | the Purchased Assets in respect of any Purchase have been selected by the Sellers in a manner that is not adverse to the interests of the Purchaser; and |
| (x) | as of the Closing Date, the Credit and Collection Policies are final, complete, approved and in effect. |
The representations and warranties made above shall survive the execution and delivery of this Agreement and each Purchase notwithstanding any investigations or examinations which may be made by or on behalf of the Purchaser and the Purchaser shall be deemed to have relied on such representations and warranties in the making or funding, as applicable, of each Purchase.
Section 3.02 Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Sellers and the Servicers as of the date of this Agreement, and each Purchase Date that:
(a) the Purchaser has been formed and is existing as a limited partnership under the laws of the Province of Ontario and none of its Organizational Documents have been amended or rescinded;
(b) the General Partner is duly organized and validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all necessary power, capacity and authority to (i) carry on its business as presently carried on by it, including in its capacity as general partner of the Purchaser, (ii) execute and deliver each Transaction Document to which the Purchaser is a party and to perform the Purchaser's obligations thereunder, in each case, in its capacity as general partner of the Purchaser, and (iii) execute and deliver the Partnership Agreement and each Transaction Document to which it is or will be a party and to perform its obligations thereunder;
(c) the Partnership Agreement grants to the General Partner all necessary power and authority to, in its capacity as general partner of the Purchaser enter into and perform the obligations of the Purchaser under this Agreement and each other Transaction Document to which the Purchaser is or will be a party or by which it is or will be bound;
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(d) this Agreement and the Transaction Documents to which it is party have been duly executed and delivered by it; and
(e) this Agreement has been duly executed and delivered by the General Partner on behalf of the Purchaser, in its capacity as general partner of the Purchaser and in its own capacity. Each Transaction Document to which the Purchaser is a party constitutes (or will, when executed and delivered constitute) a legal, valid and binding obligation of the Purchaser and the General Partner, enforceable against each of them, in accordance with its terms, subject only to the discretion that a court may exercise in granting equitable remedies and any limitation under laws relating to bankruptcy, insolvency, moratorium, fraudulent preference, reorganization or other laws affecting creditors' rights generally from time to time in effect. Each Transaction Document to which the General Partner is party constitutes (or will, when executed and delivered constitute) a legal, valid and binding obligation of the General Partner, enforceable against it, in accordance with its terms, subject only to the discretion that a court may exercise in granting equitable remedies and any limitation under laws relating to bankruptcy, insolvency, moratorium, fraudulent preference, reorganization or other laws affecting creditors' rights generally from time to time in effect.
The representations and warranties made above shall survive the execution and delivery of this Agreement and each Purchase notwithstanding any investigations or examinations which may be made by or on behalf of the Sellers and the Servicers and each of the Sellers and the Servicers shall be deemed to have relied on such representations and warranties in the completing each Purchase.
Article IV
COVENANTS
Section 4.01 General Covenants of the Sellers and the Servicers.
The Sellers and the Servicers, on a joint and several basis, covenant with the Purchaser:
(a) to not:
| (i) | change its name, identity; legal structure or Organizational Documents; or |
| (ii) | permit itself to merge, amalgamate or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to any Person, |
without the prior written consent of the Purchaser (not to be unreasonably withheld);
(b) to ensure that the Seller Parties maintain in effect and enforce policies and procedures designed to ensure compliance by the Seller Parties and their respective directors, managers, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions;
(c) to promptly obtain, comply with the terms of and do all that is necessary and within its control to maintain in full force and effect all authorizations which are at any time required in or by all Applicable Laws in connection with the performance of its duties and obligations under the Transaction Documents to which it is a party or to ensure the legality, validity, enforceability and admissibility in evidence of the Transaction Documents, except to the extent that a failure to do so has not had or could not reasonably be expected to have a Material Adverse Effect;
(d) to each ensure at all times that it possesses all material consents, authorizations, approvals, orders, licenses, franchises, permits, certificates and accreditations and all other appropriate regulatory authorities necessary to conduct its business, and that it complies with all laws, rules, regulations and ordinances of all applicable Governmental Authorities, including, without limitation, all applicable provincial regulations and similar rules in the jurisdictions in which it operates, except to the extent that any such non-compliance would not reasonably be expected to have, either individually or in aggregate, a Material Adverse Effect;
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(e) to not, other than the ownership and security interests contemplated by the Transaction Documents (i) sell, assign (by operation of law or otherwise) or dispose of any part of the Purchased Assets (except as provided herein); (ii) take any action which may cause the validity, effectiveness or enforceability of the Purchased Assets to be impaired; or (iii) take or omit to take any action which may cause an Adverse Claim to attach or extend to or otherwise burden any part of the Purchased Assets or with respect to any Underlying Agreement under which any Receivable arises, or assign any right to receive income with respect thereto, and to defend the right, title and interest of the Purchaser in, to and under any of the foregoing property, against all claims of third parties claiming through or under it;
(f) to comply with all terms of each of the Master Insurance Contracts;
(g) to not amend the terms of any Master Insurance Contract in any manner that would have a material adverse effect on the interests of the Purchaser, including changes in the premium or the cash flows and cash management arrangements pursuant to the Master Insurance Marketing Agreement, during the term of the Transaction Documents without the consent of the Purchaser;
(h) to not terminate, cancel, or surrender or permit the termination, cancellation or alteration of any Master Insurance Contract with any Seller during the term of the Security Interest or the Transaction Documents without the prior written consent of the Purchaser, provided that consent to a termination or cancellation of a Master Insurance Contract shall only be provided if it is replaced by one or more replacement Master Insurance Policies (including an existing Master Insurance Policy that is extended to cover the Receivables originated by such Seller that were subject to the Master Insurance Contract that is terminated, cancelled or surrendered) on substantially the same terms (including the corresponding Master Insurance Marketing Agreement that governs the relationship of such Seller and relevant Insurer with respect to the Master Insurance Policy) and which provide(s) substantially the same risk coverage of the Obligors and Receivables and substantially the same coverage of the proportion of the Purchased Receivables in respect of which Insurance is place, as is provided by the Master Insurance Policies in effect on the Closing Date, within (i) if such Master Insurance Policy ceases to be in effect following receipt of notice of its termination from an Insurer or due to notification by such Seller to an Insurer that such Seller is terminating a Master Insurance Policy (in each case in accordance with the terms of the relevant Master Insurance Policy), a period of time equal to the contractual termination period specified in such Master Insurance Policy, and (ii) if a Master Insurance Policy is otherwise terminated, within 180 days of the relevant Master Insurance Policy ceasing to be in effect;
(i) in the event that it becomes aware that any Insurer intends to terminate a Master Insurance Contract, to provide notice to the Purchaser of such intention to terminate such Master Insurance Contract promptly upon becoming aware of such intention;
(j) to comply with all Applicable Laws (including, without limitation, Privacy Laws) rules, regulations, orders, judgments, injunctions, awards or decrees applicable to the Sellers or the Purchased Assets, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect;
(k) to ensure that neither a Seller Party nor, to a Seller Party's knowledge, any of such Seller Party's agents, shall (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person; (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224; or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order No. 13224, the USA Patriot Act or any other Anti-Terrorism Law;
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(l) to keep and maintain all Records in accordance with GAAP and Applicable Law at the location listed in Schedule B hereto or such other location as it may notify to the Secured Parties from time to time; provided that it shall provide such Persons with written notice of such change not later than ten (10) calendar days thereafter:
| (i) | maintain adequate back-ups of the Records; |
| (ii) | ensure that the Records, to the extent that they relate to Receivables, are held to the order and on trust for the Purchaser and comply with all reasonable instructions of the Purchaser in relation to the Records to the extent that they relate to Receivables; |
| (iii) | keep and maintain Records adequate to permit, on and following the Effective Date, the daily identification of each Receivable and all Collections of and adjustments to each existing Receivable; and |
| (iv) | to timely and fully perform and comply with all provisions, covenants and other promises required to be observed by the Sellers under the Purchased Assets, and timely and fully comply in all material respects with the Credit and Collection Policies with regard to each Purchased Asset; |
(m) to vest legal and equitable title to the Purchased Assets irrevocably in the Purchaser or the General Partner, as applicable, free and clear of any Liens other than Permitted Encumbrances;
(n) to timely (taking into account any extensions) (i) file all tax returns (federal, state, provincial, foreign and local) required to be filed by it and (ii) pay, or cause to be paid, all Taxes, assessments and other governmental charges, if any, other than Taxes, assessments and other governmental charges being contested in good faith by appropriate proceedings and as to which adequate reserves have been provided in accordance with GAAP;
(o) to notify the Purchaser at least twenty (20) Business Days prior to changing the jurisdiction in which it is organized or the jurisdiction in which its principal place of business, chief executive office or registered office is located;
(p) to promptly, and in any event within five (5) Business Day, notify the Purchaser of (i) any amendment, limitation or restriction of any license issued to any Seller by a regulatory authority relating to the carrying on by any Seller of its business if such amendment, limitation or restriction would have a Material Adverse Effect; and (ii) any revocation of any license issued to any Seller by a regulatory authority relating to the carrying on by any Seller of its business;
(q) to promptly, and in any event within one (1) Business Day, notify the Purchaser of the occurrence of any Event of Default, Amortization Event or Servicer Termination Event or of any event which, with the giving of notice or the passage of time, or both, could become an Amortization Event or a Servicer Termination Event;
(r) to ensure that any collection, use, transfer or disclosure of Customer Data is in compliance with Data Requirements, and, in particular, ensure that all consents are in place that are necessary under Privacy Laws for: (i) it to share such Customer Data with the Purchaser, each other Servicer and the Verification Agent; and (ii) the Purchaser, each other Servicer and the Verification Agent to use and disclose such Customer Data for the purposes intended under the Transaction Documents;
(s) to promptly (and in any event within 5 Business Days) notify the Purchaser:
| (i) | if it receives from any Person or has been required to give to any Person any notice regarding any offense or alleged offense under Data Requirements; |
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| (ii) | if it receives notice from any of its suppliers of IT assets that are not owned or leased by the it that any Customer Data or other sensitive or confidential information (in each case, in its control or possession) was stolen or improperly accessed, used, or disclosed; |
| (iii) | of the occurrence of: |
| (A) | any loss or theft of any Customer Data, or accidental or unauthorised disclosure or access to Customer Data, including any unauthorized intrusions or security breaches of any IT asset which is owned or leased by it, in which Customer Data or other sensitive of confidential information was stolen or improperly accessed, used, or disclosed; |
| (B) | any other actual, potential or suspected incident concerning or affecting Customer Data which has or could reasonably have a significant impact on the security of Customer Data; or |
| (C) | any incident concerning or affecting Customer Data which gives rise to an obligation under Privacy Laws to notify a regulator, |
and in each case, the Sellers and the Servicers (as applicable) shall provide a summary of the steps that they have undertaken to remedy and address such circumstances and shall keep the Purchaser reasonably and regularly appraised of the results of such steps and its communications with, and the directions of, the relevant regulator(s);
(t) to record the sale of the Purchased Assets to the Purchaser as a sale for financial accounting and other reporting purposes or, if GAAP, does not permit such presentation, to disclose in its audited financial statements that the Purchased Assets have been sold to the Purchaser;
(u) to make notations in its books, records, documents and instruments relating to the Purchased Assets to evidence the interest of the Purchaser therein;
(v) to furnish to the Securitization Entity and any Person providing financing under the Securitization Documents promptly (but in any event within three (3) Business Days of becoming aware of such occurrence) written notice of the following any proposal by any Seller to increase the Intercompany Debt above the amount of Intercompany Debt outstanding as of the Closing Date;
(w) to keep each Receivable segregated and identifiable by reference to the details thereof which are electronically stored in the computer systems of the Servicers at any time;
(x) to, from time to time at its expense, promptly execute and deliver all instruments and documents and make or cause to be made all filings, recordings, registrations and take all other actions in each applicable jurisdiction, including in each jurisdiction in which any of the Obligors is located, such as are necessary to validate, preserve, perfect or protect the ownership interest of the Purchaser in the Purchased Receivables, provided that the Sellers shall not be required, whether under this paragraph or otherwise, to amend any registrations or make new registrations against any Obligors to reflect any of the transactions contemplated herein or in the Transaction Documents, unless such amendments or new registrations are required under Applicable Law in order to ensure the continued perfection of the Purchaser's interest in the Purchased Receivables; and
(y) to make arrangements with the Seller Collections Account Bank to permit any representatives designated by the Purchaser (including any delegates of the Purchaser) to have the same log-in real-time electronic view rights that the Sellers and Servicers hold in order to at any time to view the Seller Collections Accounts balances and payments activities.
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Section 4.02 Further Assurances.
The Sellers, the Servicers and the Purchaser, upon written request from the other, will from time to time make, do, execute, endorse, acknowledge and deliver or cause and procure to be made, done, executed, endorsed, acknowledged, filed, registered and delivered any and all further acts and assurances, including without limitation, any conveyance, deed, transfer, assignment or other instrument in writing as, in the opinion of either of such Persons, may be necessary or desirable to give effect to this Agreement and the transactions provided for in this Agreement and will take all such other action as may be required or desirable for more effectually and completely vesting the Purchased Assets acquired by the Purchaser.
Article V
SERVICING OF PORTFOLIO
Section 5.01 Appointment of the Servicers.
(a) The Purchaser hereby appoints each of CURO Canada Corp. and LendDirect Corp. to act as Initial Servicers and be the Purchaser's agent for the purposes of servicing respectively the Purchased Assets originated by each of them in them as set out in this Article V (it being acknowledged and agreed that the purchase of the Purchased Assets made hereunder is made on a fully-serviced basis in accordance with this Agreement) and each of CURO Canada Corp. and LendDirect Corp. hereby accepts such appointment. In this Agreement, each reference to an Initial Servicer acting in respect of Receivables should be interpreted as CURO Canada Corp. and LendDirect Corp. acting as Initial Servicer and be the Purchaser's agent for the purposes of servicing respectively the Purchased Assets originated by each of them.
(b) The Servicers may, with the Purchaser's prior consent, subcontract with any appropriately-qualified Person (including an affiliate) for the servicing of the Purchased Assets; provided that no such consent shall be required in connection with any such subcontracting to collection agencies, debt buyers and law firms in the ordinary course of business and as is customary in the consumer credit industry; and provided further that the Servicers will remain liable to the Purchaser for the performance of the duties and obligations so subcontracted, including for any losses, claims or liabilities resulting from the acts or omissions of such Person, and all other duties and obligations of the Servicers set forth in this Article V, and the Purchaser shall have the right to look solely to the Servicers for performance of such duties and obligations. LendDirect Corp. hereby appoints CURO Canada Corp., and CURO Canada Corp. hereby accepts such appointment, as sub-servicer in respect of the Receivables originated by LendDirect Corp., and the Purchaser hereby consents to such appointment. The parties agree that no sub-servicing fee shall be required and CURO Canada Corp. and LendDirect Corp. shall jointly make and file an election under section 150 of the Excise Tax Act (Canada) to exempt the sub-servicing of the Receivables from any goods and services tax/harmonized sales tax.
Section 5.02 Servicing of Portfolio.
During the term of this Agreement, unless a replacement Servicer is designated by the Purchaser pursuant to Section 7.02, the Servicers covenant, on a joint and several basis, to service the Purchased Assets using a degree of skill, care and attention that accords with customary and usual procedures employed by servicers in connection with the servicing of property of the type included in the Purchased Assets and in accordance with the Credit and Collection Policies, and subject to and in accordance with the provisions of this Agreement. Without limiting the generality of the foregoing, the Servicers, unless a replacement Servicer is designated by the Purchaser pursuant to Section 7.02, shall and covenants to:
(a) assist and collaborate with the Back-up Servicer and the Verification Agent as may be reasonably necessary or desirable to allow them to perform their duties under the Transaction Documents;
(b) maintain up-to-date Records at all times in respect of the Purchased Assets;
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(c) hold the Records in trust for the Purchaser and at any time and from time to time during regular business hours, but not more than once in any 12 month period prior to the occurrence of an Amortization Event, permit the Purchaser, its agents or representatives upon five (5) Business Days' prior notice to (i) examine and make copies of all such Records in the possession (or under the control) of the Servicers; and (ii) visit the offices and properties of the Servicers for the purpose of examining such Records and discussing matters relating to the Purchased Assets and the Servicers' performance under the Purchased Assets or hereunder with any of the Servicers' officers or employees having knowledge of such matters;
(d) (i) ensure that all required Records with respect to Receivables are maintained in either physical or electronic form at one of the Servicers' addresses identified in Schedule B; and (ii) subject to the foregoing, maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate the required Records relating to Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records, computer tapes and disks and other information reasonably necessary or advisable for the administration and collection of all Purchased Assets;
(e) direct its auditors to assist the Purchaser's auditors (if they are not the same auditors) to the extent and in such manner as is required for the Purchaser's auditors to report on the status of the Purchased Assets;
(f) timely and fully perform and comply with all terms, covenants and other provisions of the Purchased Assets required to be performed and observed by it or the Purchaser;
(g) comply in all respects with the Credit and Collection Policies in regard to each Purchased Receivable;
(h) not, without the prior written consent of the Purchaser, make any change in the Credit and Collection Policies;
(i) not extend, amend or otherwise modify or waive any term or condition of any Purchased Assets;
(j) use its commercially reasonable efforts to collect all Receivables payable in respect of the Purchased Assets, all in accordance with all Applicable Law, the provisions hereof and the Credit and Collection Policies;
(k) make all payments payable by it to government agencies and others where a statutory lien or deemed trust might arise having priority over the Purchaser's interest in any part of the Purchased Assets; provided that the Servicers may protest the payment of any such amounts if it is acting in good faith and it either provides the Purchaser with cash in an amount sufficient to satisfy the same or otherwise satisfies the Purchaser, acting reasonably, that its interests are not prejudiced thereby;
(l) as soon as possible, effect all filings or recordings with respect to the Purchaser's interest in all Related Rights necessary by law or reasonably prudent or desirable for the perfection and protection of such interest and all appropriate renewals or amendments thereof; provided, however, that, except as otherwise contemplated in the Transaction Documents, the Servicers shall not be required to effect any such filings or recordings to reflect the Purchaser as the secured party of record in connection with any security forming part of the Related Rights;
(m) promptly, from time to time, furnish to the Purchaser such documents, records, information or reports in respect of the Purchased Assets or the conditions or operations, financial or otherwise, of the Servicers as may be in existence in written form or, if available in databases maintained by the Servicers, as may be produced with existing software as the Purchaser may from time to time reasonably request; and
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(n) on or before each Weekly Settlement Date and Reporting Date, prepare and deliver to the Purchaser a Servicing Report relating to the Receivables payable in respect of the Purchased Assets as of the close of business on the last day of the immediately preceding Collection Period and the settlement transactions to be completed on the Weekly Settlement Date related to such Collection Period.
Section 5.03 Power of Attorney.
The Purchaser hereby constitutes and appoints the Servicers as the true and lawful attorneys of the Purchaser, with full power of substitution, to execute, deliver and register, for and on behalf of and in the name of the Purchaser, such documents, instruments or agreements which may be necessary or desirable to enable the Servicers to perform its obligations as servicer of the Purchased Assets which are set out in this Agreement. The Servicers agree, on a joint and several basis, that they will not exercise such power of attorney for any other purpose whatsoever. For greater certainty and without limiting the generality of the foregoing, the Purchaser hereby grants to the Servicers a power of attorney and a mandate for the purposes of executing and registering, on behalf of the Purchaser, any and all acquittances, mainlevées, radiations, reductions, retrocessions and all other documents for the purposes of discharging, releasing, reassigning, retroceding, waiving or subordinating in the ordinary course of business any rights or registration resulting from the Receivables included in the Purchased Assets, including endorsing the Purchaser's name on any consents, filings, registrations or other documents in furtherance thereof.
Section 5.04 Deemed Collections.
If any Receivable payable in respect of any Receivable that is a Purchased Asset is either (i) reduced or cancelled as a result of any breach by the Sellers or the Servicers of the terms of such Receivable, or (ii) reduced or cancelled as a result of a set-off in respect of any claim by the applicable Obligor against the Sellers, the Servicers or the Purchaser other than as a result of an act or omission of the Purchaser (whether such claim arises out of the same or a related transaction or an unrelated transaction) (each such event a "Deemed Collection"), the Servicers shall be deemed to have received for the Purchaser's account on the day of such reduction, cancellation or set-off, a Collection of such Receivable in the amount of such reduction, cancellation or set-off, and shall deposit to the Transaction Account within one (1) Business Day such amount subject to Section 5.05.
Section 5.05 Application of Collected Amounts.
All Collections received by the Servicers from Obligors in connection with the Purchased Assets shall, subject to the terms of the applicable contracts with the Obligors, be allocated in the following order of priority:
(a) firstly, to late charges in respect of Receivables;
(b) secondly, to the payment of interest;
(c) thirdly, to the payment of principal amounts then due;
(d) fourthly, to the payment of Insurance premiums; and
(e) fifthly, to the payment of additional principal amounts.
Section 5.06 Servicer Advances.
The Servicers will be required to make payments in respect of insurance premiums, taxes, late payments or costs and expenses associated with the enforcement and protection of the Purchaser's rights under any Purchased Assets, or legal fees or disbursements of counsel in connection with any of the foregoing, from its own funds, all in accordance with the practices followed from time to time by the Sellers in the normal course of its business in applying the Credit and Collection Policies. To the extent that any Servicer makes a payment from its own funds or other property to pay on behalf of the Purchaser such expenses, such Servicer shall be entitled to reimbursement therefor.
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Article VI
CASH MANAGEMENT AND INSURANCE
Section 6.01 Transaction Account.
The Sellers and the Servicers acknowledge that the Transaction Account (including all amounts deposited therein from time to time and any investments made with such amounts) is the property of the Purchaser and not of the Sellers or the Servicers.
Section 6.02 Purchaser Discretions.
The Sellers and the Servicers acknowledge that the Purchaser may in its discretion:
(a) notify any Insurer of the ownership of and/or Sellers Security Interest (as defined in the Sellers Security Agreement) in the Purchased Assets and/or direct any Insurer to pay any proceeds of the Insurance directly to an account specified by the Purchaser;
(b) notify any Obligors or any other person obligated on an account, chattel paper or instrument of the ownership of the Receivables and notify them to make payments to the party specified by the Purchaser (whether or not any Seller or Servicer was previously making collections on such accounts, chattel paper or instruments) or direct the Sellers or the Servicers, as applicable, to notify the Obligors, at the Purchaser's expense, of the ownership of the Receivables and to notify the Obligors or any other person obligated on an account, chattel paper or instrument to make payments to the party specified by the Purchaser (whether or not any Seller or Servicer was previously making collections on such accounts, chattel paper or instruments) (and the identity of the owner may be withheld in any such notification); and
(c) deliver one or more Turnover Requests (as defined in and pursuant to the Intercreditor Agreement) to the Seller Collections Accounts Bank.
Section 6.03 Deposit of Collections.
All Collections in respect of the Purchased Receivables shall be deposited by the Sellers and the Servicers into the Transaction Account within one (1) Business Day of the date of receipt by the Servicers or the Sellers and will, until so deposited, be held in the Seller Collections Accounts in trust for the Purchaser.
Section 6.04 Payment Terms.
(a) All amounts to be paid or deposited by the Sellers, the Servicers, any replacement Servicer hereunder will be paid or deposited on the day when due in same day funds.
(b) The Sellers and the Servicers will make all payments required to be made hereunder without deduction or set-off (except as expressly permitted hereunder) regardless of any defence or counterclaim.
(c) Notwithstanding any other provisions of this Agreement or any other Transaction Document to the contrary, all Collections and any amounts paid by the counterparty under any Interest Rate Caps (for the avoidance of doubt, including any payments upon a termination of any Interest Rate Cap) or proceeds of sale of any Interest Rate Cap on deposit in the Transaction Account and any interest earned thereon as of the last Business Day of the relevant Collection Period (and, following the occurrence of an Event of Default, any proceeds of enforcement of the security interests granted by the Purchaser) will be applied by the Purchaser or by the Servicers on its behalf, in accordance with instructions provided by the Purchaser, on the corresponding Weekly Settlement Date or Monthly Settlement Date, as applicable.
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Article VII
SERVICER TERMINATION
Section 7.01 Servicer Termination Events.
The happening of any of the following shall constitute a "Servicer Termination Event" hereunder:
(a) the Sellers or the Servicers fail to make any payment or deposit to be made by it or to deliver any Servicing Report to be delivered by it under this Agreement or any Transaction Document within one (1) Business Day after (i) the date such payment or deposit is required to be made under Section 2.02, Section 5.04 or Section 6.03 of this Agreement or (ii) in the case of a Servicing Report, the applicable Reporting Date;
(b) the Sellers or the Servicers fail to observe or perform any of its covenants or obligations contained in this Agreement or any Transaction Document (other than those obligations referred to in paragraph (a) above) and such failure remains unremedied for ten (10) Business Days after the earlier of (A) the Sellers or the Servicers becoming aware of such failure, and (B) written notice of such failure being given to the Sellers or the Servicers by the Purchaser;
(c) any representation or warranty made by the Sellers or the Servicers in or pursuant to this Agreement or any Transaction Document proves to have been false or incorrect when made in any material respect (or in any respect in the case of a Servicing Report) and such incorrectness shall not have been remedied within ten (10) Business Days (to the extent that such breach is curable) after the earlier of (A) the Sellers or the Servicers becoming aware of such incorrectness, and (B) the Purchaser giving notice of such incorrectness to the Sellers or the Servicers;
(d) a Seller or a Servicer becoming Insolvent;
(e) the taking of possession by an encumbrancer of assets of any Seller in excess of $650,000 (other than solely to perfect a security interest therein) or the levying or enforcement of a distress or execution or any similar process against assets of any Seller in excess of $650,000 if unsatisfied for such period as to permit a sale or other disposition of such assets to occur;
(f) either (i) the issuance or levying of a writ of execution, attachment or similar process against any property of any Seller in connection with any judgment in the amount of $650,000 or greater against any Seller, if such writ or execution, attachment or similar process shall not have been stayed within thirty (30) days of being issued, or (ii) a judgement, court ruling, regulatory action or change in law or regulation occurs that relates to the Servicers or the servicing of the Purchased Assets and has had or could reasonably be expected to have a Material Adverse Effect;
(g) a Servicer fails to pay any indebtedness in excess of $650,000 (or its equivalent in any other currency) (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and any such failure continues after the applicable grace period, if any, specified in any agreement or instrument relating to such indebtedness or redemption or retraction price; or
(h) an Event of Default shall occur.
Section 7.02 Designation of Replacement Servicer.
(a) If a Servicer Termination Event has occurred and is continuing, the Purchaser may, by notice to the Servicers terminate the appointment of the Servicers hereunder and designate the Back-up Servicer or any other Person as a replacement Servicer to succeed the Servicer to perform the obligations of the Servicers hereunder with respect to the Purchased Assets, provided that any such Person so designated other than the Back-up Servicer shall agree to perform the obligations of the Servicers hereunder and the other Transaction Documents.
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(b) Upon the appointment of a replacement Servicer pursuant to Section 7.02(a), the Servicers will, on demand and at its expense: (i) assemble all Records and make them available to the replacement Servicer including a computer data file setting forth information in respect of each Underlying Agreement; (ii) notify all Obligors and other relevant Persons (x) of the sale, assignment and transfer to the Purchaser of the Purchased Assets; and (y) to remit all payments due under such Receivables to the replacement Servicer; (iii) segregate, in a manner reasonably acceptable to the Purchaser, all cash, cheques and other instruments constituting Collections which are received by it from time to time and remit the same to the replacement Servicer duly endorsed or with duly executed instruments of transfer, if applicable; and (iv) provide the replacement Servicer with such commercially reasonable assistance as it may require in order to discharge its duties hereunder.
Section 7.03 Replacement Servicer Fee.
A replacement Servicer appointed pursuant to Section 7.02 shall be entitled to a reasonable fee for services rendered, such fee to be (a) as specified in the replacement servicing agreement entered into by the Back-up Servicer in connection with its appointment as replacement Servicer, in respect of the Back-up Servicer, or (b) otherwise settled by the Purchaser in its discretion with the replacement Servicer, in the event of this clause (b), to a maximum, in respect of any Collection Period, of 5% of the Collections remitted to the Transaction Account during such Collection Period (the "Replacement Servicer Fee"). Such Replacement Servicer Fee and any out-of-pocket expenses incurred by the replacement Servicer in connection with its duties as replacement Servicer, and any other amounts owing to it, together with any applicable taxes, shall be payable to the replacement Servicer in accordance with this Section 7.03.
Section 7.04 Power of Attorney.
(a) The Sellers and the Servicers hereby grant an irrevocable power of attorney to the Purchaser, to become effective immediately upon the occurrence of a Servicer Termination Event, and the Sellers and the Servicers hereby irrevocably appoint the Purchaser as the Sellers' or the Servicers' (as applicable) true and lawful agent and attorney-in-fact, with full power of substitution, to take in the place and stead of and in the name of the relevant Seller or Servicer (as applicable) or in the Purchaser's own name from time to time at the Purchaser's discretion, acting reasonably, such actions as such Seller or such Servicer (as applicable) may be obligated to take hereunder or as the Purchaser may deem necessary or advisable to collect, endorse, negotiate or otherwise realize on any Purchased Asset, any negotiable instrument, or any other right of any kind, held or owned by the Sellers or the Servicers (as applicable) and transferred, assigned or delivered to or received by the Purchaser as payment on account or otherwise in respect of any of the Purchased Assets, including:
| (i) | to evidence or protect the Purchaser's interest in the Purchased Assets and to execute and file, in the Sellers' or the Servicers' name (as applicable) and on the Sellers' or the Servicers' behalf (as applicable), such recording, registration, financing or similar statements (including any amendments, renewals and continuation statements) under applicable laws, including, in any personal property registry office in such jurisdictions where it may be necessary to validate, perfect or protect the Purchaser's interest in the Purchased Assets; |
| (ii) | to ask, demand, collect, sue for, recover, compound, receive and give acquittances and receipts for moneys due and to become due in connection with the Receivables or otherwise owed to the Purchaser; |
| (iii) | to receive, endorse and collect any cheques, drafts or other instruments, documents and chattel paper in connection with moneys due and to become due in connection with the Underlying Agreements forming part of the Purchased Assets or otherwise owed to the Purchaser; |
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| (iv) | to file any claims or take any action or institute any proceedings that the Purchaser may deem to be necessary or desirable for the collection of any Purchased Asset; and |
| (v) | to prepare, execute, deliver, and/or register in the Sellers' or the Servicers' name (as applicable) and on the Sellers' or the Servicers' behalf (as applicable), such instruments and documents (including assignments) necessary or desirable in furtherance of the foregoing. |
(b) The power of attorney granted hereby shall be expressly coupled with an interest in favour of the Purchaser. The powers of attorney and other rights and privileges granted hereby shall survive any dissolution, liquidation or winding-up of the Sellers.
Section 7.05 Additional Actions Upon a Servicer Termination Event.
Without limiting the provisions of this Agreement or any power of attorney of the Sellers or the Servicers provided herein, upon the occurrence of a Servicer Termination Event, the Sellers shall, duly complete, execute and deliver to the Purchaser deeds of assignment or transfer by the Sellers in favour of the Purchaser, in registrable form and in substance sufficient to cause all immovable hypothecs included in the Purchased Assets to be assigned and transferred to the Purchaser on title to the related immovable properties, and make all registrations and generally complete all formalities required under the laws of the Province of Québec in order to render the sale and assignment of the Purchased Assets opposable against the Obligors and all third persons in accordance with Articles 1641, 1645 and 3003 of the Civil Code of Québec. The Sellers will act upon the instructions of the Purchaser as contemplated by this Section 7.05.
Article VIII
CONDITIONS PRECEDENT
Section 8.01 Conditions to Initial Purchase.
(a) The obligation of the Purchaser to complete the initial Purchase on the Closing Date shall be subject to the Purchaser having received the following documents in form and substance satisfactory to the Purchaser on or before the Closing Date (unless otherwise specified below or waived by the Purchaser):
| (i) | a certificate of an officer of each Seller, dated the Closing Date certifying (A) that attached thereto is a true and complete copy of its certificate and articles of incorporation and any amendments thereto, and its by-laws, each as in effect on the date of such certificate; (B) that attached thereto is a true and complete copy of a resolution adopted by its board of directors authorizing the execution, delivery and performance of this Agreement and the Transaction Documents to which it is party, and that such resolution has not been modified, rescinded or amended and is in full force and effect; (C) as to the incumbency and true specimen signature of each of its officers executing this Agreement or any of the Transaction Documents to which it is party, (D) a certificate of compliance (or equivalent) issued in its jurisdiction of incorporation, and an equivalent certificate from the appropriate authority in each other jurisdiction in which qualification is necessary in order for it to own or lease its property and conduct its business, each to be certified as of a recent date, (E) that it is not Insolvent, (F) that all representations and warranties provided by it set forth in this Agreement and the other Transaction Documents, as applicable, are true and correct as of the date hereof in all material respects, and (G) that as at the date hereof no Servicer Termination Event has occurred; |
| (ii) | copies of this Agreement and each of the Transaction Documents to which it is a party duly executed by its authorized signatories; |
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| (iii) | reports showing the results of searches conducted against it under applicable personal property security registers in the Provinces where it has its head office and registered office and where the Purchased Assets are located, together with executed copies of all discharges or releases of prior security interests relating to Purchased Assets that are then to be sold hereunder; provided that it may establish that any particular registration does not affect any such Purchased Assets by delivering a letter or acknowledgment signed by the applicable secured party; |
| (iv) | a copy of verifications statements or other filings filed in the Provinces where it has its head office and registered office, that are sufficient to perfect the interests of the Purchaser in the Purchased Assets as against creditors of the Sellers; |
| (v) | a copy of verifications statements or other filings filed in the Provinces where it has its head office and registered office and where the Seller Collections Accounts are located, that are sufficient to perfect the security interests in the Seller Collections Accounts granted to the Purchaser pursuant to the Sellers Security Agreement, as against creditors of the Sellers; |
| (vi) | executed copies of all discharges and releases, if any, necessary to discharge or release all security interests, hypothecs and other rights or interest of any Person in the Related Rights, previously granted by or through it and which could constitute an Adverse Claim, together with, where applicable, copies of the relevant financing change statements or other discharge statements with the registration particulars stamped thereon; and |
| (vii) | such other approvals, opinions, or other documents as the Purchaser may reasonably request. |
Section 8.02 Conditions to Each Purchase.
(a) The obligation of the Purchaser to complete any Purchase pursuant to the delivery of a Purchase Notice shall be subject to the satisfaction of the following conditions on or before the applicable Purchase Date unless otherwise specified below or waived by the Purchaser:
| (i) | the Sellers shall have delivered to the Purchaser a duly completed Purchase Notice in respect of the proposed Purchase in accordance with Section 2.01(a) in which the Purchase Date specified is during the Revolving Period; and |
| (ii) | executed copies of all discharges and releases, if any, necessary to discharge or release all security interests, hypothecs and other rights or interest of any Person in the Related Rights, previously granted by or through the Sellers and which could constitute an Adverse Claim, together with, where applicable, copies of the relevant financing change statements or other discharge statements with the registration particulars stamped thereon. |
(b) The obligation of the Sellers to complete any Purchase shall be subject to the receipt by the Sellers of the Closing Payment in respect of such Purchase.
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Article IX
MISCELLANEOUS
Section 9.01 Waivers; Amendments.
(a) No amendment or waiver of any provision of this Agreement will be effective unless it is in writing signed by the parties hereto.
(b) No failure or delay by the Purchaser in exercising any right or power hereunder or under any other Transaction Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Purchaser hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have.
Section 9.02 Binding Effect; Assignability.
This Agreement shall be binding upon and enure to the benefit of the parties hereto and their respective successors and assigns. The Sellers and the Servicers shall not have the right to assign any interest herein without the consent of the Purchaser. The Sellers and the Servicers acknowledge that the Purchaser may assign its interest herein without further notice to, or the consent of, the Sellers or the Servicers (as applicable). The Sellers and the Servicers agree that, upon such assignment, the assignee or its further assigns may enforce directly, without joinder of the Purchaser, the rights set forth in this Agreement. The Sellers and the Servicers agree to grant to any such assignee or its further assigns or its agents such powers of attorney as may be necessary for the exercise of their rights hereunder.
Section 9.03 Notices.
All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile to the addresses set out in Schedule B.
Section 9.04 Indemnification.
(a) The Sellers and the Servicers hereby agree, on a joint and several basis, to indemnify the Purchaser to save it harmless from and against any and all damages, losses, claims, liabilities, costs and expenses (including reasonable legal fees and disbursements) awarded against or incurred by the Purchaser arising out of or as a result of:
| (i) | any representation or warranty made or deemed to be made by the Sellers or the Servicers (or any of its officers), in or in connection with this Agreement or any Transaction Document, which was incorrect in any material respect when made or deemed made or delivered; |
| (ii) | the failure by the Sellers or the Servicers to perform or observe any of its covenants, duties or obligations hereunder or under any of the Transaction Documents; |
| (iii) | the failure by any of the Sellers or the Servicers to comply with any applicable law, rule, regulation, order, judgment, injunction, award or decree with respect to any part of the Purchased Assets, or the non-conformity of any Purchased Assets with any applicable law, rule, regulation, order, injunction, award or decree; |
| (iv) | any claims made by any Insurer or Western Life Assurance Company or any of its Affiliates not directly resulting from an action of the Purchaser; |
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| (v) | any commingling of Collections with other funds of the Sellers or the Servicers or any other Person; |
| (vi) | any Canadian, foreign, federal, provincial, state, municipal, local or other tax of any kind or nature whatsoever, including any capital, income, sales, excise, business or property tax, any customs duty, and any penalty or interest in respect of any thereof, which may be imposed on the Purchaser on account of any payment made under this Section 9.04; and |
| (vii) | any disclosure of personal information (within the meaning of applicable Canadian privacy legislation) of any individual by any Seller or Servicer to any Person, that is not in compliance with PIPEDA or any other applicable Canadian privacy legislation. |
(b) The Sellers and the Servicers shall not be liable to the Purchaser or any other Person for any damages, losses, claims, liabilities, costs or expenses resulting solely from the failure of any Obligor to discharge its payment obligations under any Receivables and the Related Rights which form part of the Purchased Assets.
(c) The Sellers, the Servicers and the Purchaser each agree to provide reasonable assistance to the other party, at the request of such other party and, in either case, at the Sellers' or the Servicers' expense (as applicable), in any action, suit or proceeding brought by or against, or any investigation involving such requesting party relating to any of the transactions contemplated hereby or to any part of the Purchased Assets. If a Seller has acknowledged its liability under Section 9.04(a) in respect of any damages, losses, claims, liabilities, costs or expenses in connection with any such action, suit, proceeding or investigation, and, in the sole determination of the Purchaser, acting reasonably, that Seller has the financial ability to pay such damages, losses, claims, liabilities, costs and expenses, the relevant Seller or Servicer (as applicable) will have the right, on behalf of the Purchaser but at the Sellers' or the Servicers' expense, to defend such action, suit or proceeding, or participate in such investigation, with counsel selected by it, and will have sole discretion as to whether to litigate, appeal or settle.
(d) The obligations of the Sellers and the Servicers under this Section 9.04 will, subject to Applicable Law, survive this Agreement and remain in full force and effect.
Section 9.05 Confidentiality.
(a) Each Party and each of their officers, directors and other advisers (each, a "Receiving Party") agrees to maintain the confidentiality of all Information of a confidential nature furnished or delivered to it pursuant to or in connection with the Transaction Documents. Such confidential Information may be used by the Receiving Parties only for the purpose for which it was disclosed to them and may be disclosed only for the purpose of or in connection with the transactions contemplated by the Transaction Documents to:
| (i) | such party's Affiliates or such party's or its Affiliates' directors, officers, employees, agents, accountants, auditors, legal counsel and other representatives (collectively, "Receiving Party Representatives"), in each case, who need to know such information for the purpose of assisting in the negotiation, completion and administration of such Transaction Documents, provided that any such Receiving Party Representative is made aware of the Receiving Party's obligations under this Section 9.05 prior to such disclosure being made; |
| (ii) | such party's permitted assigns, transferee, successors and participants to the extent such disclosure is made pursuant to a written agreement to hold such information upon substantially the same terms as this Section 9.05 or such other terms as may be agreed by the Servicers and the Purchaser; |
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| (iii) | any person who is a party to a Transaction Document; |
| (iv) | the extent required by Applicable Law or by any Governmental Authority; |
| (v) | the extent that such party needs to disclose the same for the exercise, protection or enforcement of any of its rights under any of the Transaction Documents or in connection with any action or proceeding relating to any Transaction Document; and |
| (vi) | if the applicable Party shall have consented, in writing, to such disclosure. |
Section 9.06 Costs and Expenses.
The Sellers and the Servicers will pay all documented and invoiced expenses incurred in the performance of their obligations under this Agreement and all reasonable out-of-pocket costs and expenses of the Purchaser in connection with all filings and registrations necessary or desirable to vest in the Purchaser all right, title and interest in and to the Purchased Assets.
Section 9.07 Limited Recourse.
Recourse to the Purchaser or the General Partner for non-payment of any amount owing hereunder shall be limited to the Purchased Assets and any amounts received by the Purchaser in respect of the Purchased Assets and no other property or assets of the Purchaser will be subject to levy, execution or other enforcement procedure with regard to any obligation under this Agreement.
Section 9.08 No Petition.
The Sellers and the Servicers hereby agree, on a joint and several basis, to not institute against the Purchaser or the General Partner any bankruptcy, reorganization, arrangement, insolvency, winding-up, receivership, security enforcement or liquidation proceedings, or other proceeding under any federal or provincial bankruptcy, insolvency or similar law in connection with any obligations relating to this Agreement. The foregoing shall not limit the rights of the Sellers or the Servicers to file any claim in or otherwise take any action with respect to any such proceeding that was instituted against the Purchaser by any Person other than the Sellers or the Servicers.
Section 9.09 Time of Essence.
Time will be of the essence of this Agreement.
Section 9.10 Failure to Perform.
If the Sellers or the Servicers fail to perform any of its agreements or obligations hereunder, the Purchaser may (but will not be required to) itself perform, or cause to be performed, such agreement or obligation at, in the case of any such failure to perform by the Sellers or the Servicers, the cost of the Sellers or the Servicers (as applicable).
Section 9.11 Further Assurances.
The parties hereto agree, from time to time, to enter into such further agreements and to execute all such further instruments as may be reasonably necessary or desirable to give full effect to the terms of this Agreement and to the ability of the Purchaser to exercise or enforce any of its rights and remedies hereunder.
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Section 9.12 Remedies.
The remedies herein provided are cumulative and not exclusive of any remedies provided at law.
Section 9.13 Counterparts; Integration; Effectiveness; Electronic Execution.
(a) This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement shall constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective when it shall have been executed by the Purchaser and when the Purchaser shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
(b) Delivery of an executed counterpart of a signature page of this Agreement by telecopy, emailed pdf or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement. The words "execution," "signed," "signature," "delivery," and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby or thereby shall be deemed to include electronic signatures, deliveries 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, physical delivery thereof 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 Electronic Commerce Act (Ontario) and similar laws in relevant jurisdictions; provided that nothing herein shall require the Purchaser to accept electronic signatures in any form or format without its prior written consent.
Section 9.14 Severability.
Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 9.15 Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein, provided, however, that if the laws of any jurisdiction other than the Province of Ontario shall govern in regard to the validity, perfection or effect of perfection of any Lien or in regard to procedural matters affecting enforcement of any Liens on all or any party of the Purchaser Party Assets, such laws of such other jurisdictions shall continue to apply to that extent.
(b) The Purchaser hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any Ontario court or Canadian federal court sitting in Toronto, Ontario in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Province of Ontario or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Purchaser may otherwise have to bring any action or proceeding relating to this Agreement against the Sellers or the Servicers or their properties in the courts of any jurisdiction.
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(c) The Sellers and the Servicers hereby irrevocably and unconditionally waive, to the fullest extent each may legally and effectively do so, any objection which each may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.03. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
Section 9.16 Waiver of Jury Trial.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
[Signature Pages Follow]
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
CURO CANADA RECEIVABLES II LIMITED PARTNERSHIP, by its general partner, CURO CANADA RECEIVABLES II GP INC., as Purchaser | ||
| By: | /s/ Gary Fulk | |
| Name: Gary Fulk | ||
| Title: President | ||
Signature Page to Sale and Servicing Agreement
| CURO CANADA CORP., as Seller and Servicer | ||
| By: | /s/ Gary Fulk | |
| Name: Gary Fulk | ||
| Title: President | ||
Signature Page to Sale and Servicing Agreement
| LENDDIRECT CORP., as Seller and Servicer | ||
| By: | /s/ Gary Fulk | |
| Name: Gary Fulk | ||
| Title: President | ||
Signature Page to Sale and Servicing Agreement
Exhibit 10.12
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this “Agreement”) dated as of the 12th day of May, 2023.
AMONG:
ACM AIF EVERGREEN P3 DAC SUBCO LP,
ATALAYA ASSET INCOME FUND PARALLEL 345 LP,
ACM A4 P2 DAC SUBCO LP,
ACM ALAMOSA I LP, and
ACM ALAMOSA I-A LP
(hereinafter referred to collectively as the “Atalaya Lenders”)
- and -
MIDTOWN MADISON MANAGEMENT LLC
(hereinafter referred to as “Atalaya Agent”)
- and -
CURO CANADA RECEIVABLES II LIMITED PARTNERSHIP,
by its general partner,
CURO CANADA RECEIVABLES II GP INC.
(hereinafter referred to as the “Atalaya Debtor”)
- and -
CURO CANADA RECEIVABLES II GP INC.
(hereinafter referred to as the “Atalaya GP”)
- and -
WF MARLIE 2018-1, LTD.
(hereinafter referred to as the “WAM Lender”)
- and -
WATERFALL ASSET MANAGEMENT, LLC
in its capacity as agent for the WAM Lender
(hereinafter referred to as the “WAM Agent”)
- and -
CURO CANADA RECEIVABLES LIMITED PARTNERSHIP,
by its general partner,
CURO CANADA RECEIVABLES GP INC.
(hereinafter referred to as the “WAM Debtor”)
- and -
LENDDIRECT CORP.
(hereinafter referred to as “LendDirect”)
- and -
CURO CANADA CORP.
(hereinafter referred to as “CURO Canada”
and, together with LendDirect, the “Sellers”, and each a “Seller”)
RECITALS:
| 1. | The WAM Lender has provided certain financing to the WAM Debtor and may in the future provide further financing to the WAM Debtor to operate its business, including, without limitation, pursuant to the second amended and restated credit agreement dated as of November 12, 2021 between, inter alios, the WAM Debtor, as borrower, and the WAM Agent in its capacity as administrative agent thereunder (as it may be amended, supplemented, restated or otherwise modified from time to time, the “WAM Credit Agreement”), pursuant to which the WAM Lender agreed to provide certain loans to the WAM Debtor in order to finance the purchase from time to time by the WAM Debtor of certain eligible consumer loans and all other related rights and assets with respect thereto from the Sellers pursuant to the second amended and restated sale and servicing agreement dated as of November 12, 2021, between, inter alios, the Sellers, each as seller and servicer, and the WAM Debtor, as purchaser (as it may be amended, supplemented, restated or otherwise modified from time to time, the “WAM SSA”), all as more particularly set out in the WAM SSA. |
| 2. | In connection with the WAM SSA and the WAM Credit Agreement, the WAM Debtor has (i) granted a security interest to the WAM Agent in all of its present and after acquired property and assets pursuant to a general security agreement dated as of August 2, 2018 (as it may be amended, supplemented, restated or otherwise modified from time to time, the “WAM GSA”); and (ii) obtained a security interest from each of the Sellers in the Debtor Collateral, pursuant to that certain second amended and restated sellers security agreement dated as of September 26, 2019 (as it may be amended, supplemented, restated or otherwise modified from time to time, the “WAM Sellers Security Agreement”). |
| 3. | The Atalaya Lenders have provided certain financing to the Atalaya Debtor and may in the future provide further financing to the Atalaya Debtor to operate its business, including, without limitation, pursuant to a credit agreement dated on or about the date hereof between, inter alios, the Atalaya Debtor, as borrower, and the Atalaya Agent in its capacity as administrative agent thereunder (as it may be amended, supplemented, restated or otherwise modified from time to time, the “Atalaya Credit Agreement”), pursuant to which the Atalaya Lenders have agreed to provide certain loans to the Atalaya Debtor to finance the purchase from time to time by the Atalaya Debtor of certain eligible consumer loans and all other related rights and assets with respect thereto from the Sellers pursuant to a sale and servicing agreement dated on or around the date hereof between, inter alios, the Sellers, each as seller and servicer, and the Atalaya Debtor, as purchaser (as it may be amended, supplemented, restated or otherwise modified from time to time, the “Atalaya SSA”), all as more particularly set out in the Atalaya SSA. |
| 4. | In connection with the Atalaya SSA and Atalaya Credit Agreement, the Atalaya Debtor has (i) granted a security interest to Atalaya Agent in all of its present and after acquired property and assets, pursuant to a general security agreement dated on or about the date hereof (as it may be amended, supplemented, restated or otherwise modified from time to time, the “Atalaya GSA”); and (ii) obtained a security interest from each of the Sellers in the Debtor Collateral, pursuant to that certain sellers security agreement dated on or about the date hereof (as it may be amended, supplemented, restated or otherwise modified from time to time, the “Atalaya Sellers Security Agreement”). |
| 5. | Each of the Agents and the Debtors desire to enter into this agreement to agree to the pari passu and pro rata treatment of each Agent’s Liens, the release protocols and to establish certain other rights and interests, all as provided for herein. |
NOW THEREFORE, for value received and in order to induce the Agents, the Atalaya Lenders and the WAM Lender to advance credit, make loans or provide financial accommodations to and purchase loans from their respective Debtor, in each case under the agreements to which they are or will become a party with their respective Debtor, the parties hereto agree with each other as follows:
| 1. | Recitals |
1.1 The recitals to this Agreement shall form an integral part of this Agreement (including in the recitals above) and shall be read and construed as part of this Agreement.
| 2. | Definitions and Interpretation |
2.1 Capitalized terms used in this Agreement and not otherwise defined herein shall have the respective meanings ascribed thereto in the Personal Property Security Act (Ontario) as amended or re-enacted from time to time. In this Agreement, the following terms shall have the following meanings attributed to them:
"Agents“ means , collectively, the WAM Agent and the Atalaya Agent.
“Agent Security” means the WAM Agent Security and the Atalaya Agent Security.
"Applicable Law" means all applicable federal, provincial, state, territorial and local laws, statutes, regulations, rules, executive orders, supervisory requirements, directives, guidelines, circulars, opinions, codes of conduct, decisions, rulings, advisories, bulletins, interpretive letters, and other official releases customarily considered to be binding of or by any government, or any authority, department, or agency thereof, as now and hereafter in effect.
“Asset Notice” has the meaning set out in Section 5.4.
“Atalaya Agent” means Midtown Madison Management LLC, in its capacity as administrative agent for and on behalf of the Atalaya Lenders under the Atalaya Credit Agreement.
“Atalaya Agent Collateral” shall mean all of the present and future assets, rights, property, undertaking or interests in the real and personal property of the Atalaya Debtor, including the Debtor Collateral.
“Atalaya Agent Security” means any Liens now or in future held by the Atalaya Agent, for and on behalf of itself and the Atalaya Lenders, granted by the Atalaya Debtor in the Atalaya Agent Collateral, as collateral security for the obligations of the Atalaya Debtor to the Atalaya Agent and the Atalaya Lenders under the Atalaya Credit Agreement and related documentation.
“Atalaya Agent Termination Date” means the date on which all of the Atalaya Obligations (other than contingent indemnification obligations for which demand has not been made) under the Atalaya Credit Agreement and the Loan Documents (as defined in the Atalaya Credit Agreement) have been irrevocably paid in full or completely discharged, the Atalaya Debtor does not have any further obligations under the Atalaya Credit Agreement and the Loan Documents (as defined in the Atalaya Credit Agreement) and the Atalaya Agent has discharged its Atalaya Agent Security and has authorized the discharge by the Atalaya Debtor of its Atalaya Debtor Security.
“Atalaya Credit Agreement” has the meaning set out in the recitals.
“Atalaya Credit and Collection Policies” means, with respect to the Sellers, the applicable credit and collection and risk underwriting policies for the Atalaya Receivables as in effect on the date hereof and approved by the Atalaya Lenders from time to time.
“Atalaya Debtor Security” means any Liens now or in future held by the Atalaya Debtor, granted by the Sellers in the Debtor Collateral, as collateral security for the obligations of the Sellers to the Atalaya Debtor under the Atalaya SSA.
“Atalaya Eligible Receivables” has the meaning given to the term “Eligible Receivables” under the Atalaya SSA.
“Atalaya GP” has the meaning set out in the recitals.
“Atalaya GSA” has the meaning set out in the recitals.
“Atalaya Obligations” means all obligations, liabilities and indebtedness of every nature of the Atalaya Debtor from time to time owed to the Atalaya Lenders and Atalaya Agent under the Atalaya Credit Agreement and the Loan Documents (as defined in the Atalaya Credit Agreement), including without limitation the principal amount of all debts, claims and indebtedness, accrued and unpaid interest and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, therefore, now and from time to time hereafter owing, due or payable.
“Atalaya Purchased Receivables” means any Atalaya Eligible Receivables and Pending Atalaya Eligible Receivables that are purchased by the Atalaya Debtor pursuant to the Atalaya SSA.
“Atalaya Receivables” means the indebtedness and other obligations originally owed to any of the Sellers in connection with any and all liens, installment sale agreements, instruments, consumer finance paper and/or promissory notes securing and evidencing unsecured multipay consumer line of credit and installment loans made and/or acquired by any of the Sellers as the case may be, which were originated in accordance with the Atalaya Credit and Collection Policies or which are otherwise included as Atalaya Agent Collateral.
“Atalaya Sellers Secured Obligations” means all obligations and liabilities of the Sellers to the Atalaya Debtor or any indemnified party, individually or collectively, existing on the date of the first purchase of the Atalaya Purchased Receivables or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under the Atalaya SSA or any of the other documents in connection therewith or other instruments at any time evidencing any thereof.
“Atalaya Sellers Security Agreement” has the meaning set out in the recitals.
“Atalaya SSA” has the meaning set out in the recitals.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Toronto, Ontario and New York City, New York are authorized or required by law to remain closed.
“Collateral” means, collectively, the Atalaya Agent Collateral and the WAM Debtor Collateral.
“Collections” means, with respect to any Receivable, (a) all cash collections and other cash proceeds of such Receivable and (b) all cash proceeds in the Related Rights for such Receivable, in each case including, but not limited to, principal, interest, fees, liquidation proceeds, payments received in connection with Insurance and proceeds from Insurance.
“Debtor Collateral” means the assets of each Seller, whether now owned or hereafter acquired, in which a Lien is granted or purported to be granted by the respective Seller to each of the Debtors as security for the applicable Sellers Secured Obligations, namely:
| (a) | the Seller Collections Accounts; |
| (b) | all credit balances and all other amounts from time to time on deposit in, accredited to, or held for the credit of the Seller Collections Accounts and all the rights which may be derived therefrom; |
| (c) | the interest at any time deposited or required to be deposited into each of the Seller Collections Accounts or otherwise received and held by the Debtors; and |
| (d) | all proceeds of the foregoing whether such proceeds arise before or after commencement of proceedings under any applicable bankruptcy, insolvency or other similar law. |
“Debtor Security” means, collectively, the WAM Debtor Security and the Atalaya Debtor Security.
“Debtors” means, collectively, the WAM Debtor and the Atalaya Debtor and “Debtor” means any one of them.
“Financing Agreement” means any one of the WAM Credit Agreement or the Atalaya Credit Agreement.
“Funders” means, collectively, the Atalaya Lenders, the WAM Lender, the Atalaya Agent, and the WAM Agent, and “Funder” means any one of them.
“Governmental Authority” means the government of the U.S., Canada, any other nation or any political subdivision thereof, whether state, provincial, territorial, or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothec (whether legal or conventional), hypothecation, encumbrance, charge, option or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
"Obligor" means, with respect to any Receivable, the Person or Persons obliged to make payments in respect thereof.
"Organizational Documents" of any Person means its memorandum and articles of association, articles or certificate of incorporation or formation and by-laws, limited liability agreement, partnership agreement, declaration of trust or other comparable charter or organizational documents as amended from time to time.
“Pending Atalaya Eligible Receivables” has the meaning given to the term “Pending Eligible Receivables” under the Atalaya SSA.
“Pending WAM Eligible Receivables” has the meaning given to the term “Pending Eligible Receivables” under the WAM SSA.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Proceeds” means personal property in any form derived directly or indirectly from any dealing with a person’s assets or that indemnifies for loss due to assets of such person that are destroyed or damaged.
“Purchased Receivables” means any one of the WAM Purchased Receivables or the Atalaya Purchased Receivables.
“Receivables” means, collectively, the WAM Receivables and the Atalaya Receivables.
“Receivables List” has the meaning set out in Section 5.1.
“Records” means, at any time in relation to a Seller and with respect to any Receivable, all contracts and other documents, records and other information (including, without limitation, computer programs, tapes, disks, data processing software and related property and rights) relating to such Receivables, any Related Rights and the related Obligor, in each case, related to such Seller, which are reasonably necessary, in light of the circumstances then subsisting, to service or enforce such Receivable and Related Rights.
“Related Rights” means, in respect of any Receivable:
| (a) | all Liens and property securing or attaching to such Receivable from time to time, if any, purporting to secure payment of such Receivable or otherwise, together with any and all security documents describing any assets securing such Receivable; |
| (b) | all deposits, insurance, guarantees, letters of credit, indemnities, warranties and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Underlying Agreement for such Receivable or otherwise; |
| (c) | all rights to receive and obtain payment under the Underlying Agreement for such Receivable including rights of enforcement under the Underlying Agreement against the relevant Obligor; |
| (d) | all Records related to such Receivable; |
| (e) | all rights to enforce payment under the Underlying Agreement against the relevant Obligor and all rights to demand, sue for, recover, receive and give receipt for all such amounts; |
| (f) | all Collections and any other proceeds (including the proceeds of any sale or disposal) related to such Receivable; and |
| (g) | all proceeds of any of the foregoing. |
“Security Documents” means, collectively, the WAM GSA and the Atalaya GSA, and “Security Document” means any one of them.
“Seller Collections Accounts” means the accounts of the Sellers into which Collections are received from Obligors or transferred from other Seller accounts.
“Sellers Secured Obligations” means the Atalaya Sellers Secured Obligations and the WAM Sellers Secured Obligations, collectively.
“SSA” means collectively, the WAM SSA and the Atalaya SSA.
“Subject Purchased Receivable” has the meaning set out in Section 5.4.
“Termination Date” means the latest to occur of (i) the WAM Agent Termination Date and (ii) the Atalaya Agent Termination Date.
“Underlying Agreements” means, collectively, any agreements with an Obligor (including any modifying agreements supplemental thereto) from which any Receivable derives and any related documents, and “Underlying Agreement” means any one of them.
“WAM Agent” means Waterfall Asset Management, LLC, in its capacity as administrative agent for and on behalf of the WAM Lender under the WAM Credit Agreement.
“WAM Agent Collateral” shall mean all of the present and future assets, rights, property, undertaking or interests in the real and personal property of the WAM Debtor, including the Debtor Collateral.
“WAM Agent Security” means any Liens now or in future held by the WAM Agent, for and on behalf of itself and the WAM Lender, granted by the WAM Debtor in the WAM Agent Collateral, as collateral security for the obligations of the WAM Debtor to the WAM Agent and the WAM Lender under the WAM Credit Agreement and related documentation.
“WAM Agent Termination Date” means the date on which all of the WAM Obligations (other than contingent indemnification obligations for which demand has not been made) under the WAM Credit Agreement and the Loan Documents (as defined in the WAM Credit Agreement) have been irrevocably paid in full or completely discharged, the WAM Debtor does not have any further obligations under the WAM Credit Agreement and the Loan Documents (as defined in the Atalaya Credit Agreement) and the WAM Agent has discharged its WAM Agent Security and has authorized the discharge by the WAM Debtor of its WAM Debtor Security.
“WAM Credit Agreement” has the meaning set out in the recitals.
“WAM Credit and Collection Policies” means, with respect to the Sellers, the applicable credit and collection and risk underwriting policies for the WAM Receivables as in effect on August 2, 2018 and approved by the WAM Lender from time to time.
“WAM Debtor Security” means any Liens now or in future held by the WAM Debtor, granted by the Sellers in the Debtor Collateral, as collateral security for the obligations of the Sellers to the WAM Debtor under the WAM SSA.
“WAM Eligible Receivables” has the meaning given to the term “Eligible Receivables” under the WAM SSA.
“WAM GSA” has the meaning set out in the recitals.
“WAM Obligations” means all obligations, liabilities and indebtedness of every nature of the WAM Debtor from time to time owed to the WAM Lender and WAM Agent under the WAM Credit Agreement and the Loan Documents (as defined in the WAM Credit Agreement), including without limitation the principal amount of all debts, claims and indebtedness, accrued and unpaid interest and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, therefore, now and from time to time hereafter owing, due or payable.
“WAM Purchased Receivables” means any WAM Eligible Receivables and Pending WAM Eligible Receivables that are purchased by the WAM Debtor pursuant to the WAM SSA.
“WAM Receivables” means (a) the indebtedness and other obligations originally owed to any of the Sellers in connection with any and all liens, installment sale agreements, instruments, consumer finance paper and/or promissory notes securing and evidencing unsecured multipay consumer line of credit and installment loans made and/or acquired by any of the Sellers as the case may be, which were originated in accordance with the WAM Credit and Collection Policies or which are otherwise included as WAM Agent Collateral.“WAM Sellers Secured Obligations” means all obligations and liabilities of the Sellers to the WAM Debtor or any indemnified party, individually or collectively, existing on the date of the first purchase of the WAM Purchased Receivables or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under the WAM SSA or any of the other documents in connection therewith or other instruments at any time evidencing any thereof.
“WAM Sellers Security Agreement” has the meaning set out in the recitals.
“WAM SSA” has the meaning set out in the recitals.
2.2 In the event of any conflict between the provisions of this Agreement and the provisions of any Financing Agreement or Security Document, the provisions of this Agreement shall govern.
2.3 The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the WAM Debtor, the Atalaya Debtor, the WAM Agent and the Atalaya Agent. Each of the Debtors and the Sellers acknowledges the terms of, and agrees to be bound by, this Agreement.
| 3. | Consent and Acknowledgment |
3.1 Each of the WAM Debtor and the WAM Agent has received a copy of the executed Atalaya Credit Agreement, the Atalaya Sellers Security Agreement and the Atalaya GSA and consents to the creation and issuance of security interests by each of the Sellers in favour of the Atalaya Debtor pursuant to the Atalaya Sellers Security Agreement and to the incurring by each of the Sellers of the indebtedness and/or obligations secured thereby.
3.2 Each of the Atalaya Debtor and the Atalaya Agent has received a copy of the executed WAM Credit Agreement, the WAM Sellers Security Agreement and the WAM GSA and consents to the creation and issuance of security interests by each of the Sellers in favour of the WAM Debtor pursuant to the WAM Sellers Security Agreement and to the incurring by each of the Sellers of the indebtedness and/or obligations secured thereby.
| 4. | Pari Passu Ranking, Turnover Obligations and Waiver of Right to Contest Liens |
4.1 The parties hereto acknowledge that the Seller Secured Obligations and the Debtor Security (and the corresponding sub-Liens of the WAM Agent and the Atalaya Agent pursuant to the applicable Agent Security) shall be treated as having equal priority and rank and be enforceable pari passu for all purposes and at all times, and shall rank pari passu as provided in this Agreement. No payment on account of the Seller Secured Obligations may be made by a Seller or a Debtor or received by a Debtor or an Agent, as applicable, (whether as principal, interest, fees or otherwise) unless a pro rata payment is made on account of, or in respect of each other portion of the Seller Secured Obligations.
4.2 The parties hereto acknowledge that such pari passu and pro rata treatment applies in all events and circumstances regardless of:
| (a) | the date of execution, attachment, registration, perfection or re-perfection of any security interest held by the Debtors or the Agents; |
| (b) | the date of any advance or financings provided to any Debtor pursuant to its respective Financing Agreement and the date of any purchase of any Purchased Receivables by any Debtor from the Sellers; |
| (c) | the date of default by a Debtor under its respective Financing Agreement, the date of demand or commencement of any proceedings to enforce any Agent Security or any Debtor Security, the dates of crystallization of any floating charges held by an Agent or a Debtor, as the case may be, or the exercise of any other right or remedy provided for under any Agent Security, any Debtor Security, any Financing Agreement, any Security Documents or at law; |
| (d) | the place or jurisdiction of execution, delivery, attachment, registration, perfection or re-perfection of all or any portion of the Agent Security or any Debtor Security; |
| (e) | any priority granted by any principle of law or any statute, including the Bank Act (Canada), any personal property security legislation, corporation securities legislation, or like statute; or |
| (f) | the provisions of the instruments or documents creating any Agent Security or any Debtor Security. |
4.3 To the extent any Agent takes or authorizes any action by way of suit, foreclosure, sale, quit claim or acceptance in lieu of foreclosure or otherwise proceeds to realize against any Debtor Collateral, any amounts received under such proceedings shall be distributed pro rata between the Agents in accordance with this Agreement.
4.4 All payments, distributions or other amounts on account of, or in respect of, any Seller Secured Obligations which are received by a Debtor or Agent contrary to this Agreement shall be held in trust by such receiving Debtor or Agent for the benefit of each other Debtor or Agent, as applicable, segregated from other funds and property of such receiving Debtor or Agent and immediately paid pro rata over to each other Debtor or Agent, as applicable, in the same form as received (with any necessary endorsement) to be applied to the payment or prepayment of each other Debtor’s or Agent’s, as applicable, Seller Secured Obligations in accordance with this Agreement.
4.5 No Debtor or Agent shall (i) assert in any action, suit or proceeding whatsoever the invalidity, unenforceability or ineffectiveness of this Agreement, the WAM Credit Agreement or any of the other documents or other instruments in connection therewith (including, without limitation, the WAM Agent Security, the WAM Debtor Security, the WAM GSA, the WAM SSA or the WAM Sellers Security Agreement), the Atalaya Credit Agreement or any of the other documents or other instruments in connection therewith (including, without limitation, the Atalaya Agent Security, the Atalaya Debtor Security, the Atalaya GSA, the Atalaya SSA or the Atalaya Sellers Security Agreement), or (ii) participate in or co-operate with any Person whatsoever to pursue any such action, suit or proceeding.
| 5. | Receivables List and Asset Releases |
5.1 The Sellers, will, each time a Purchase Notice (within the meaning of the WAM SSA or the Atalaya SSA, as the case may be) is delivered to a Debtor pursuant to the WAM SSA or Atalaya SSA, as the case may be (and a corresponding Borrowing Request (within the meaning of the WAM Credit Agreement or Atalaya Credit Agreement, as the case may be) is made by the applicable Debtor pursuant to the applicable Financing Agreement), deliver to each of the Debtors and (on behalf of the Debtors) to each of the Agents a complete listing of the Receivables included in each such Purchase Notice in electronic format by way of e-mail and, in respect of each Receivable, will identify: (i) the Seller of such Receivable; (ii) the Receivable identification number; (iii) the date of origination of such Receivable; and (iv) the current outstanding principal balance of the Receivable (a “Receivables List”). Subject to Section 5.4, the Receivables List is intended to provide the Debtors and the Agents with prima facie confirmation of whether such Receivable is a WAM Purchased Receivable or an Atalaya Purchased Receivable, as applicable, and the respective ownership interest of the applicable Debtor and respective security interest of the applicable Agent (and the related relative rights and/or priorities of the Debtors and the Agents, as the case may be) in the Receivables. Delivery of the Receivables List will constitute the Sellers’ representation and warranty to the Debtors and the Debtors’ representation and warranty to the Agents of the completeness and accuracy of such Receivables List.
5.2 To the extent that, in connection with a Purchase Notice (within the meaning of the WAM SSA) delivered by a Seller to the WAM Debtor pursuant to the WAM SSA (and a corresponding Borrowing Request (within the meaning of the WAM Credit Agreement) made by the WAM Debtor pursuant to the WAM Credit Agreement), a Seller proposes that any WAM Purchased Receivable(s) become(s) an Atalaya Purchased Receivable, the Seller may at least 10 Business Days prior to the proposed purchase and funding make a request in writing to the WAM Debtor and the WAM Agent for (i) a specific, separate written release and discharge of the WAM Debtor’s and WAM Agent’s respective ownership interests and security interests in the applicable WAM Purchased Receivable(s), and (ii) the consent of the WAM Debtor and WAM Agent to the sale, transfer and assignment by the applicable Seller to the Atalaya Debtor of the Receivables, Related Rights and relevant Collections pursuant to the Atalaya SSA (and corresponding grant of a security interest in such Atalaya Purchased Receivables to the Atalaya Agent pursuant to the Atalaya GSA). It shall be in the WAM Agent’s sole discretion whether such release, discharge and consent may be granted by it and by the WAM Debtor, on such terms and conditions in form and substance satisfactory to it. To the extent that the WAM Agent so consents, it shall grant the written release, discharge and consent in respect of the specific Receivables List at least two (2) Business Days prior to the proposed purchase and funding and if the WAM Agent does not provide a written release by such date, this shall be deemed to be a rejection of the proposal.
5.3 To the extent that, in connection with a Purchase Notice (within the meaning of the Atalaya SSA) delivered by a Seller to the Atalaya Debtor pursuant to the Atalaya SSA (and a corresponding Borrowing Request (within the meaning of the Atalaya Credit Agreement) made by the Atalaya Debtor pursuant to the Atalaya Credit Agreement), a Seller proposes that any Atalaya Purchased Receivable(s) become(s) a WAM Purchased Receivable, the Seller may at least 10 Business Days prior to the proposed purchase and funding make a request in writing to the Atalaya Debtor and the Atalaya Agent for (i) a specific, separate written release and discharge of the Atalaya Debtor’s and Atalaya Agent’s respective ownership interests and security interests in the applicable Atalaya Purchased Receivable(s), and (ii) the consent of the Atalaya Debtor and Atalaya Agent to the sale, transfer and assignment by the applicable Seller to the WAM Debtor of the Receivables, Related Rights and relevant Collections pursuant to the WAM SSA (and corresponding grant of a security interest in such WAM Purchased Receivables to the WAM Agent pursuant to the WAM GSA). It shall be in the Atalaya Agent’s sole discretion whether such release, discharge and consent may be granted by it and by the Atalaya Debtor, on such terms and conditions in form and substance satisfactory to it. To the extent that the Atalaya Agent so consents, it shall grant the written release, discharge and consent in respect of the specific Receivables List at least two (2) Business Days prior to the proposed purchase and funding and if the Atalaya Agent does not provide a written release by such date, this shall be deemed to be a rejection of the proposal.
5.4 If, after reviewing a Receivables List, either Agent identifies an error, discrepancy or inconsistency in such Receivables List, such Agent shall within one (1) Business Day of becoming aware of such error notify the other Agent and each other party to this Agreement in writing (an “Asset Notice”). The Sellers shall promptly investigate the issue and shall provide a written response that will include a description of the corrective action to be taken by the Sellers to each of the parties hereto no later than two (2) Business Days after the date the Asset Notice is received and the parties shall make commercially reasonable efforts to in good faith resolve the error, discrepancy or inconsistency. Each Agent hereby agrees that, while such resolution is pending, without limiting the rights of indemnification and other remedies that any Agent may have against the Sellers under its applicable Financing Agreement or at law, in respect of the Receivable(s) that is/ are the subject of the Asset Notice (a “Subject Purchased Receivable”), each Agent will have an equal ranking and pari passu claim on such Subject Purchased Receivable and Related Rights with respect thereto. In the event that a resolution in respect of an Asset Notice cannot be agreed to among the parties hereto within 90 days of the date the Asset Notice is received, the applicable Subject Purchased Receivable shall be removed from the Receivables List and shall be replaced with a substantially similar Receivable as consented to in writing by each Agent, such consent not to be unreasonably withheld or delayed.
| 6. | Representations and Warranties |
6.1 Each of the parties hereto hereby certifies, represents and warrants that on and as of the date hereof:
| (a) | it is duly incorporated or formed and is existing pursuant to the laws of its jurisdiction of incorporation or formation. |
| (b) | this Agreement has been duly authorized, executed and delivered by such party by all necessary corporate and other organizational action on the part of such party, and constitutes the legal, valid and binding obligations of such party, enforceable against it in accordance with its terms; and |
| (c) | the execution, delivery and performance by such party of this Agreement do not and will not (i) require any authorization, consent, approval, order, filing, registration or qualification by or with any Governmental Authority, except those that have been obtained and are in full force and effect, or (ii) violate any provision of (A) any Applicable Law or any order, writ, injunction or decree presently in effect having applicability to such party, or (B) the Organizational Documents of such party; |
| 7. | Miscellaneous |
7.1 Notwithstanding the provisions of this Agreement, nothing in this Agreement shall preclude any of the party’s security from attaching or re-attaching, as applicable, to all or any portion of such party’s assets that have been released and discharged after (i) the applicable Debtor has reacquired such assets or (ii) the applicable Agent has released its security interest in such assets pursuant to the terms of this Agreement, a Financing Agreement or a Security Document.
7.2 Any Proceeds received by a Seller, a Debtor or by a Funder in respect of assets of a Seller charged by any Debtor Security or assets of a Debtor charged by any Agent Security shall be dealt with according to the preceding provisions hereof as though such Proceeds were paid or payable as proceeds of realization of the collateral for which they compensate or in respect of such Purchased Receivable, as applicable, and all Proceeds received by a Seller, by a Debtor or by a Funder contrary to the provisions of this Agreement shall be held by such Seller, such Debtor or such Funder, as applicable, in trust for the benefit of the applicable Funder.
7.3 From time to time upon written request therefor, each of the Agents shall advise each other of the particulars of the indebtedness and/or obligations of their respective Debtors to each of them and all security held by each therefor.
7.4 Each Seller and the applicable Debtor in the case of each Financing Agreement shall permit each applicable Agent and its employees, agents and contractors, access at all reasonable times to inspect any property and assets of the Seller or any assets financed by an Agent that are in the possession of the applicable Seller or applicable Debtor, as the case may be, or its agents, as applicable, upon which such party has a charge, ownership interest or security interest in accordance with the terms hereof, and access to make copies of or extracts from any books of account and all records, ledgers, reports, documents and other writings relating to such property and assets or such assets, and to permit such other party to exercise any right it may have to remove such property and assets or such assets from the premises of such Seller or Debtor, as the case may be, at all reasonable times without interference, provided that such other party shall promptly repair any damage directly caused to the premises by the removal of any such property or assets or such assets (ordinary wear and tear excepted).
7.5 None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by each of the parties hereto. A waiver by an Agent or a Debtor, as the case may be, of any right or remedy hereunder on any one occasion will not be construed as a bar to any right or remedy that such party would otherwise have on any future occasion.
| 8. | General |
8.1 No Agent shall transfer or assign its Financing Agreement or any of its Collateral without obtaining from the assignee or transferee a written agreement in favour of the other parties hereto to be bound by the provisions of this Agreement.
8.2 Any notice required or permitted to be given pursuant to this Agreement shall be in writing and shall be addressed and delivered to the parties hereto as follows:
| (a) | To the Atalaya Agent: |
[* * * * *]
| (b) | To the Atalaya Lenders: |
[* * * * *]
| (c) | To the Atalaya Debtor or the Atalaya GP: |
[* * * * *]
| (d) | To the WAM Agent: |
[* * * * *]
| (e) | To the WAM Lender: |
[* * * * *]
| (f) | To the WAM Debtor: |
[* * * * *]
| (g) | To the Sellers: |
[* * * * *]
Notices may be sent by fax, email or served personally and in each case shall be deemed to be received on the day so transmitted by fax, email or personally delivered.
8.3 Nothing in this Agreement is intended to or shall impair (i) as between any of the Debtors and the Agents, the obligations of such Debtor under the Financing Agreement to which it is a party or (ii) as between any of the Sellers and the Debtors, the obligations of such Seller under each SSA, as applicable, which in each case are absolute and unconditional, to pay principal, interest, fees and other amounts as provided in any Financing Agreement or related agreements, respectively, including as and when the same shall become due and payable in accordance with their terms. For greater clarity and notwithstanding the foregoing, except as expressly modified by this Agreement, all of the terms, conditions, covenants, agreements and other provisions of any Financing Agreement, any SSA or any Security Document shall remain in full force and effect in accordance with their respective terms.
8.4 The Atalaya Lenders and the Atalaya Agent shall not contest directly or indirectly (or support any Person in contesting) the validity, perfection, priority (other than to enforce their Lien priority rights hereunder) or enforceability of this Agreement or any Lien granted by a Seller to the WAM Debtor or by the WAM Debtor to the WAM Agent with respect to the applicable WAM Obligations or any purchase from a Seller by the WAM Debtor of any asset. Furthermore, the Atalaya Lenders and the Atalaya Agent will not take any action that would interfere with any enforcement action undertaken by the WAM Agent under the WAM Credit Agreement with respect to the Debtor Collateral. The Atalaya Lenders and the Atalaya Agent hereby waive any and all rights each of them may have to contest, protest, object to, or interfere with the manner in which the WAM Agent seeks to enforce its Liens in any Debtor Collateral.
8.5 This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.
8.6 This Agreement shall terminate and be of no further force and effect as to all of the parties hereto on the Termination Date. Notwithstanding the foregoing, Sections 3.1 and 3.2 shall survive the termination of this Agreement.
8.7 The parties hereto agree to execute and deliver such further and other documents and perform and cause to be performed such further and other acts and things as may be necessary or desirable in order to give full effect to this Agreement and every part thereof, including all acts, deeds and agreements as may be necessary or desirable for the purpose of registering or filing notice of the terms of this Agreement.
8.8 This Agreement shall be governed and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.
8.9 Each party hereto hereby irrevocably and unconditionally submits itself and its property, to the non-exclusive jurisdiction of the courts of the Province of Ontario, and any appellate court thereof, in any action, suit or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action, suit or proceeding may be heard and determined in Ontario. Each of the parties hereto agrees that a final judgment in any such action, suit or proceeding will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by the laws of the Province of Ontario. Nothing in this Agreement will affect any right that any party hereto may otherwise have to bring any action, suit or proceeding relating to this Agreement against any other party hereto or its properties in the courts of any other jurisdiction. Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any Ontario court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, any forum non conveniens defense to the maintenance of such action or proceeding in any such court.
8.10 Each of the WAM Debtor and the Atalaya Debtor hereby consents to the terms of this Agreement, and confirms to and agrees with the WAM Agent or the Atalaya Agent, as applicable, that, so long as such Debtor remains obligated or indebted to such Agent, each Debtor shall stand possessed of its assets so charged in favour of the WAM Agent or the Atalaya Agent, as the case may be, in accordance with their respective interests and priorities as set out in this Agreement. Each of the Sellers hereby consents to the terms of this Agreement, and confirms to and agrees with the WAM Debtor or the Atalaya Debtor, as the case may be, that, so long as a Seller remains obligated or indebted to such Debtor, the Seller shall stand possessed of its assets so charged in favour of the WAM Debtor or the Atalaya Debtor, as the case may be, in accordance with their respective interests and priorities as set out in this Agreement.
8.11 The undersigned declare that it is their express wish that this document and all related documents be drawn up in English. Les soussignees declarent que le present document ainsi que tousles documents qui s’y rattachent, sont rediges en anglais selon leur volonte expresse.
8.12 Words importing the singular number include the plural and vice versa and words importing gender include the masculine, feminine and neuter genders. The division of this Agreement into Sections and subsections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. Unless something in the subject matter or context is inconsistent therewith, references herein to Sections are to Sections of this Agreement.
8.13 This Agreement may be executed in several counterparts, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument and shall be effective as of the formal date hereof. The execution and delivery of counterparts by email in PDF form or other electronic means shall be binding upon each of the parties hereto.
8.14 This Agreement constitutes the entire contract among the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.
8.15 Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
[Signatures contained on the following pages]
IN WITNESS WHEREOF the parties hereto have executed this Agreement by their duly authorized officers.
| ACM AIF EVERGREEN P3 DAC SUBCO LP | ||
| Per: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Intercreditor Agreement
| ATALAYA ASSET INCOME FUND PARALLEL 345 LP | ||
| Per: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Intercreditor Agreement
| ACM A4 P2 DAC SUBCO LP | ||
| Per: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Intercreditor Agreement
| ACM ALAMOSA I LP | ||
| Per: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Intercreditor Agreement
| ACM ALAMOSA I-A LP | ||
| Per: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Intercreditor Agreement
| MIDTOWN MADISON MANAGEMENT LLC | ||
| Per: | /s/ David Aidi | |
| Name: David Aidi | ||
| Title: Authorized Signatory | ||
Signature Page to Intercreditor Agreement
| CURO CANADA RECEIVABLES II LIMITED PARTNERSHIP, by its general partner, CURO CANADA RECEIVABLES II GP INC. | ||
| Per: | /s/ Gary Fulk | |
| Name: Gary Fulk | ||
| Title: President | ||
| Per: | /s/ Rebecca Fox | |
| Name: Rebecca Fox | ||
| Title: Secretary | ||
Signature Page to Intercreditor Agreement
| CURO CANADA RECEIVABLES II GP INC. | ||
| Per: | /s/ Gary Fulk | |
| Name: Gary Fulk | ||
| Title: President | ||
| Per: | /s/ Rebecca Fox | |
| Name: Rebecca Fox | ||
| Title: Secretary | ||
Signature Page to Intercreditor Agreement
| WF MARLIE 2018-1, LTD. | ||
| Per: | /s/ Kenneth Nick | |
| Name: Kenneth Nick | ||
| Title: Authorized Signatory | ||
Signature Page to Intercreditor Agreement
| WATERFALL ASSET MANAGEMENT, LLC | ||
| Per: | /s/ Kenneth Nick | |
| Name: Kenneth Nick | ||
| Title: Authorized Signatory | ||
Signature Page to Intercreditor Agreement
| CURO CANADA RECEIVABLES LIMITED PARTNERSHIP, by its general partner, CURO CANADA RECEIVABLES GP INC. | ||
| Per: | /s/ Gary Fulk | |
| Name: Gary Fulk | ||
| Title: President | ||
| Per: | /s/ Anthony Coombs | |
| Name: Anthony Coombs | ||
| Title: Secretary | ||
Signature Page to Intercreditor Agreement
| ACKNOWLEDGED AND AGREED BY: | ||
| LENDDIRECT CORP. | ||
| Per: | /s/ Gary Fulk | |
| Name: Gary Fulk | ||
| Title: President | ||
| Per: | /s/ Anthony Coombs | |
| Name: Anthony Coombs | ||
| Title: Secretary | ||
Signature Page to Intercreditor Agreement
| ACKNOWLEDGED AND AGREED BY: | ||
| CURO CANADA CORP. | ||
| Per: | /s/ Gary Fulk | |
| Name: Gary Fulk | ||
| Title: President | ||
| Per: | /s/ Anthony Coombs | |
| Name: Anthony Coombs | ||
| Title: Secretary | ||
Signature Page to Intercreditor Agreement
Cover |
May 12, 2023 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | May 12, 2023 |
| Entity File Number | 001-38315 |
| Entity Registrant Name | CURO GROUP HOLDINGS CORP |
| Entity Central Index Key | 0001711291 |
| Entity Tax Identification Number | 90-0934597 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 200 West Hubbard |
| Entity Address, Address Line Two | 8th Floor |
| Entity Address, City or Town | Chicago |
| Entity Address, State or Province | IL |
| Entity Address, Postal Zip Code | 60654 |
| City Area Code | 312 |
| Local Phone Number | 470-2000 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common stock |
| Trading Symbol | CURO |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |
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