EX-10.1 2 aout-ex101_35.htm EX-10.1 aout-ex101_35.htm

Exhibit 10.1

AMENDMENT NO. 1
TO
LOAN AND SECURITY AGREEMENT

THIS AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT, dated as of March 25, 2022 (this “Amendment”), is entered into by and among AOB PRODUCTS COMPANY, a Missouri corporation (“AOB Products”), CRIMSON TRACE CORPORATION, an Oregon corporation (“Crimson”; and together with AOB Products, each a “Borrowers” and collectively, the “Borrowers”), AMERICAN OUTDOOR BRANDS, INC., a Delaware corporation (“Parent”), BATTENFELD ACQUISITION COMPANY INC, a Delaware corporation (“Battenfeld”), BTI TOOLS, LLC, a Delaware limited liability company (“BTI”), ULTIMATE SURVIVAL TECHNOLOGIES, LLC, a Delaware limited liability company (“UST”), AOBC ASIA CONSULTING, LLC, a Delaware limited liability company (“AOBC Asia”; and together with Parent, Battenfeld, BTI, UST, each a “Guarantor” and collectively, the “Guarantors”), the lenders which are now or which hereafter become a party hereto (each a “Lender” and collectively, the “Lenders”) and TD BANK, N.A., a national banking association (in its individual capacity, “TD Bank”), in its capacity as agent (TD Bank, in such capacity, “Agent”) for Secured Parties.

BACKGROUND

A.Agent and Lenders have previously entered into financing arrangements with Borrowers pursuant to a certain Loan and Security Agreement, dated as of dated August 24, 2020, executed among Borrowers, Guarantors, TD Bank, as a Lender and in its capacity as Agent for the Secured Parties thereunder and as defined therein (as the same now exists, as amended hereby, and as the same may hereafter be further amended, modified, supplemented, renewed, restated or replaced, the “Loan Agreement”) and various other documents, instruments and agreements executed and delivered to Agent and Lenders in connection therewith or related thereto (together with the Loan Agreement, collectively, the “Loan Documents”); and

B.On March 14, 2022, AOB Products entered into and executed a certain Asset Purchase Agreement with Fahrenheit Technologies, Inc., a Michigan corporation (herein referred to as “Fahrenheit Technologies”), as “Company”, and the “Shareholders” of Fahrenheit Technologies identified therein (the “Fahrenheit APA”), pursuant to which AOB Products purchased and acquired substantially all of the Company’s assets and the “Business” (as defined in the Fahrenheit APA) related thereto, on and subject to the terms and conditions set forth in the Fahrenheit APA (the “Fahrenheit Technologies Acquisition”);  

C.Borrowers have requested that Agent and Lenders amend the Loan Agreement in connection with the consummation of the Fahrenheit Technologies Acquisition to (a) increase the Revolver Commitments, the Maximum Credit and the Maximum Revolving Advance Amount, (b) increase the maximum amount of outstanding Letters of Credit that are permitted at any time under the Loan Agreement, (c) extend the Termination Date, and (d) amend certain other terms of the Loan Agreement; and Agent and Lenders are willing to agree to the foregoing on and subject to the terms and conditions set forth in this Amendment;

NOW THEREFORE, in consideration of the foregoing recitals, mutual agreements contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 


SECTION 1.Amendments to Loan Agreement.  Subject to the satisfaction of all of the conditions set forth in Section 3 of this Amendment, the terms and provisions of the Loan Agreement are hereby amended in accordance with Exhibit A attached hereto (the “Amended Loan Agreement”) by deleting the stricken text (indicated textually in the same manner as the following example: stricken text) and by inserting the double-underlined text (indicated textually in the same manner as the following example: double underlined text), in each case, in the place where such text appears therein, such that, immediately after giving effect to this Amendment, the Loan Agreement will read as and consist of the Amended Loan Agreement set forth in Exhibit A.  

SECTION 2.Representations and Warranties of Loan Parties.  The Loan Parties represent, warrant and covenant that:

(a)After giving effect to this Amendment and the consummation of the Fahrenheit Technologies Acquisition (collectively, the “Amendment No. 1 Transactions”), all representations and warranties contained in the Loan Agreement and in the other Loan Documents to which such Loan Party is a party are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of this Amendment, as though made on and as of the date of this Amendment (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date);

(b)There exists no Default or Event of Default, in each case, immediately before and after giving effect to the consummation of the Amendment No. 1 Transactions;

(c)Each Loan Party (i) is duly organized or formed and existing and in good standing (to the extent such concept exists in the relevant jurisdiction) under the laws of the jurisdiction of its organization or formation, (ii) is qualified to do business in any state where the failure to be so qualified could reasonably be expected to result in a Material Adverse Effect, (iii) has all requisite power and authority to own and operate its properties, and to carry on the business of the Loan Parties, taken as a whole, as now conducted and as proposed to be conducted, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect, and (iv) has all requisite power and authority to enter into this Amendment and the other Loan Documents to which it is a party and to carry out the Amendment No. 1 Transactions contemplated thereby;

(d)As to each Loan Party, the execution, delivery, and performance by such Loan Party of this Amendment has been duly authorized by all necessary corporate and/or limited liability company action (as applicable) on the part of such Loan Party;

(e)As to each Loan Party, the execution, delivery, and performance by such Loan Party of this Amendment and the consummation of the Fahrenheit Technologies Acquisition does not and will not (i) violate any material provision of federal, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, the certificate of formation or certificate of incorporation (as applicable), operating agreement, by laws, or other organizational documentation of any Loan Party or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan Party where any such conflict, breach or default could individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (iii) result in or require the creation or imposition of any Liens of any nature whatsoever upon any assets of any Loan Party, other than Permitted Encumbrances, or (iv) require any approval of any holder of Equity Interests of a Loan Party or any approval

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or consent of any Person under any Material Contract of any Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of the consummation of the Fahrenheit Technologies Acquisition, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect.  

SECTION 3.Conditions Precedent to Effectiveness of Amendment.  This Amendment shall be effective at the time that each of the conditions precedent set forth in this Section 3 has been fully satisfied, as determined by Agent:

(a)Amendment.  Agent shall have received duly executed signature pages for this Amendment signed by the Loan Parties, Agent, and the Lenders;

(b)Secretary’s Certificates.  Agent shall have received a certificate from the Secretary of each Loan Party (i) attesting to the resolutions of such Loan Party’s managers or board of directors authorizing its execution, delivery, and performance of this Amendment, (ii) authorizing specific officers of such Loan Party to execute the same, (iii) attesting to the incumbency and signatures of such specific officers of such Loan Party, and (iv) appending to such certificate the good standing (or equivalent status) of such Loan Party in its jurisdiction of organization and each applicable jurisdiction where the conduct of such Loan Party’s business activities or the ownership of its properties necessitates qualification, as evidenced by good standing certificates (or the equivalent thereof issued by any applicable jurisdiction) dated not more than thirty (30) days prior to the Amendment No. 1 Effective Date, issued by the Secretary of State or other appropriate official of each such jurisdiction;

(c)Solvency Certificate.  The Agent shall have received a Solvency certificate signed by a Responsible Officer of Parent dated the Amendment No. 1 Effective Date, certifying as to the Solvency of the Loan Parties, taken as a whole, after giving effect to the Amendment No. 1 Transactions and the consummation of the Fahrenheit Technologies Acquisition;

(d)Fahrenheit Technologies Acquisition Documents.  Agent shall have received final executed copies of the Fahrenheit Technologies Acquisition Documents, including all schedules and exhibits thereto and the Transition Services Agreement executed between Fahrenheit Technologies and AOB Products, in the form appended as Exhibit B to the Fahrenheit Technologies APA (herein referred to as the “Fahrenheit Transition Services Agreement”), and evidence satisfactory to Agent that the Fahrenheit Technologies Acquisition closed in accordance with the terms thereof in all material respects.  The Fahrenheit Technologies APA shall not have been amended or waived or modified in a manner materially adverse to Agent and Lenders, in their capacity as such, without the written consent of the Agent (such consent not to be unreasonably withheld, delayed or conditioned); provided that (i) any reduction in the purchase price under the Fahrenheit Technologies APA will be deemed not to be materially adverse to Agent and Lenders, (ii) any increase in the purchase price will be deemed to be not materially adverse to Agent and Lenders so long as such increase is funded by an increase in equity contributions to Borrowers, (iii) the granting of any consent under the Fahrenheit Technologies APA that is not materially adverse to the interests of Agent and Lenders will not otherwise constitute an amendment, modification or waiver thereto, and (iv) any amendment, modification or waiver of Section 3.8(a) or Section 6.2(c) of the Fahrenheit Technologies APA (with respect to any required absence of a material adverse effect on the business, operations, prospects, properties, or financial condition of Fahrenheit Technologies), as in effect on the date of execution the Fahrenheit Technologies APA) will be deemed materially adverse to the interests of Agent and Lenders.  Each of the representations and warranties made by each Person party to the Fahrenheit Technologies APA is true and correct in all material respects (or, if already qualified by materiality, in all respects);     

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(e)Transition Services Agreement Performance Agreement.  Fahrenheit Technologies and the “Shareholders” party to the Fahrenheit Technologies APA shall have executed and delivered with and in favor of Agent an agreement, in form and substance satisfactory to Agent, pursuant to which (among other things) Fahrenheit Technologies and such “Shareholders” will agree to perform certain services under the Fahrenheit Transition Services Agreement for the benefit of Agent, following the occurrence of an Event of Default;

(f)Consents.  Agent shall have received evidence that any and all Consents necessary to permit the effectuation of the Amendment No. 1 Transactions contemplated hereunder and pursuant to the Fahrenheit Technologies Acquisition Documents, including all governmental and third party approvals required under the Fahrenheit Technologies APA in order to consummate the Fahrenheit Technologies Acquisition (including, to the extent required under the Fahrenheit Technologies APA, shareholder approvals, landlords’ consents, and Hart-Scott-Rodino clearance) were received by Loan Parties or were waived in accordance with the Fahrenheit Technologies Acquisition Documents;  

(g)Fahrenheit Technologies Lien Releases.  Agent shall have received evidence that Fahrenheit Technologies has caused all of its Indebtedness that is secured by any Liens on its assets and properties sold to AOB Products pursuant to the Fahrenheit Technologies APA to be paid in full and any and all Liens securing such Indebtedness to be released prior to or concurrently with the consummation of the Fahrenheit Technologies Acquisition;

(h)Legal Opinions.  Agent shall have received, in form and substance satisfactory to Agent, the executed legal opinion of (i) Greenberg Traurig LLP as counsel to the Loan Parties and (ii) Stinson LLP, as special Missouri counsel to the Loan Parties, each of which shall cover such matters incident to the Amendment No. 1 Transactions as Agent may reasonably require and each Loan Party hereby authorizes and directs such counsel to deliver such opinion to Agent and Lenders;

(i)Costs and Expenses.  Agent shall have received payment or reimbursement by Loan Parties of all costs and expenses that are incurred or paid by Agent and Lenders in connection with the Amendment No. 1 Transactions on or prior to the date hereof and that are reimbursable or payable to Agent pursuant to Section 16.10 of the Loan Agreement;

(j)Excess Availability.  After giving effect to the Revolving Advances made on the Amendment No. 1 Effective Date, all Revolving Advances outstanding as of the Amendment No. 1 Effective Date and the consummation of the Fahrenheit Technologies Acquisition and the other Amendment No. 1 Transactions contemplated hereunder, Borrowers shall have Excess Availability of not less than $40,000,000;

(k)Commitment Fee.  As consideration for Agent and the Lenders entering into this Amendment and providing for the increase in Revolver Commitment of each Lender, Agent shall have received for the ratable benefit of Lenders, a commitment fee in the amount of $100,000, which fee shall be fully earned and due and payable in full as of the date hereof and may, at Agent’s election, be charged to any account of Borrowers that is maintained by Agent;  

(l)Representations and Warranties.  All of the representations and warranties of the Loan Parties under this Amendment and the other Loan Documents shall be true and correct in all material respects (in each case, without duplication of any materiality qualifier contained herein or therein, as applicable) as of the date hereof except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date);

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(m)No Default or Event of Default.  No Default or Event of Default shall have occurred and be continuing or would result after giving effect to this Amendment and the consummation of the Amendment No. 1 Transactions;

(n)Credit Agreement Schedules.  Agent shall have received updated Schedules (the “Replacement Schedules”) to the Credit Agreement for the following existing Schedules to the Credit Agreement (the “Existing Schedules”), which Replacement Schedules (i) shall update each of the Existing Schedules in accordance with the applicable terms of the Credit Agreement that relate to updating of each of Existing Schedules, (ii) shall be in form and substance satisfactory to Agent, (iii) shall be appended to and be deemed incorporated into the Amended Loan Agreement, and (iv) shall replace and supersede in their entirety the following Existing Schedules: Schedule R-1 – Real Property, Schedule 4.4 - Equipment, Inventory and Books and Records Locations, Schedule 4.14(c) – Location of Chief Executive Offices, Schedule 5.2(a) - Jurisdictions of Qualification and Good Standing, Schedule 5.6 - Corporate Names, Schedule 5.8(b)(i) - Litigation / Commercial Tort Claims / Money Borrowed, Schedule 5.9 - Intellectual Property, Source Code Escrow Agreements, Schedule 5.13 - Labor Disputes, Schedule 5.21 - Material Contracts, and Schedule 5.23 - Bank Accounts; Credit Card Arrangements; and

(o)Replacement IP Security Agreements.  Agent shall have received an Intellectual Property Security Agreement executed by each of AOB Products and Crimson in substantially the same form as the an Intellectual Property Security Agreement executed by each of AOB Products and Crimson with Agent on the Closing Date (each, an “Existing IP Security Agreement”), containing updated Schedules which include all Intellectual Property in which AOB Products and Crimson previously granted to Agent a security interest in and lien upon all Intellectual Property respectively identified in each such Existing IP Security Agreement and all Intellectual Property respectively acquired by each of AOB Products and Crimson form and after the Closing Date.

SECTION 4.Reference to and Effect upon the Loan Documents.

(a)Except as expressly modified hereby, all terms, conditions, covenants, representations and warranties contained in the Loan Agreement and the other Loan Documents, all rights of Agent and the Lenders and all of the Obligations, shall remain in full force and effect.  The Loan Parties hereby confirm that the Loan Agreement and the other Loan Documents are in full force and effect and that no Loan Party has any right of setoff, recoupment or other offset or any defense, claim or counterclaim with respect to any of the Obligations, the Loan Agreement or any other Loan Document.

(b)Except as expressly set forth herein, the execution, delivery and effectiveness of this Amendment and any waivers set forth herein shall not directly or indirectly (i) constitute a consent or waiver of any past, present or future violations of any provisions of the Loan Agreement, this Amendment or any other Loan Document or (ii) amend, modify or operate as a waiver of any provision of the Loan Agreement or any other Loan Documents or any right, power or remedy of any member of the Lender Group.

(c)From and after the date hereof, (i) the term “Agreement” in the Loan Agreement, and all references to the Loan Agreement in any Loan Document, shall mean the Loan Agreement, as amended hereby, and (ii) the term “Loan Documents” in the Loan Agreement and the other Loan Documents shall include, without limitation, this Amendment and any agreements, instruments and other documents executed and/or delivered in connection herewith.

(d)Except as expressly set forth herein, neither Agent nor any Lender has waived, is by this Amendment waiving or has any intention of waiving (regardless of any delay in exercising such rights and remedies) any Default or Event of Default which may be continuing on the date hereof or any

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Default or Event of Default which may occur after the date hereof, and neither Agent nor any Lender has agreed to forbear with respect to any of its rights or remedies concerning any Defaults or Events of Default which may have occurred or are continuing as of the date hereof or which may occur after the date hereof.

(e)This Amendment shall not be deemed or construed to be a satisfaction, reinstatement, novation or release of the Loan Agreement or any other Loan Document.

SECTION 5.Costs and Expenses.  Borrowers agrees to pay all costs and expenses of Agent in connection with the preparation, negotiation, execution, delivery and administration of this Amendment and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith in accordance with the Loan Agreement (as amended hereby).  All obligations provided herein shall survive any termination of the Loan Agreement as modified hereby.

SECTION 6.Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.  THE CHOICE OF LAW AND VENUE SET FORTH IN SECTION 16.1 OF THE LOAN AGREEMENT AND WAIVER OF JURY TRIAL SET FORTH IN SECTION 12.3 OF THE LOAN AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE AND SHALL APPLY IN ALL RESPECTS TO THIS AMENDMENT.

SECTION 7.Severability.  Each provision of this Amendment shall be severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.

SECTION 8.Headings.  Headings used in this Amendment are for convenience only and shall not affect the interpretation of any provision hereof.

SECTION 9.Loan Document.  This Amendment shall constitute a Loan Document.

SECTION 10.Reaffirmation.  Each Loan Party, as debtor, grantor, pledgor, guarantor, assignor, or in other similar capacities in which such Loan Party grants Liens in its properties or otherwise acts as accommodation party, guarantor or indemnitor, as the case may be, in any case under the Loan Documents, hereby (i) acknowledges, ratifies and confirms that all Obligations constitute valid and existing “Obligations” under the Loan Agreement (as amended by this Amendment), and (ii) ratifies and confirms that (x) all Loan Documents to which it is a party and (y) its respective guarantees, pledges, grants of Liens and other similar rights or obligations, as applicable, under each of the Loan Documents to which it is party, in each case, remain in full force and effect after the effectiveness of this Amendment.  Without limiting the generality of the foregoing, each Loan Party further agrees (A) that any reference to “Obligations” contained in any Loan Documents shall include, without limitation, the “Obligations” as such term is defined in the Loan Agreement (as amended by this Amendment) and (B) that the related guarantees and grants of security contained in such Loan Documents shall include and extend to such Obligations.

SECTION 11.Electronic Execution; Counterparts.  This Amendment may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement.  Any signature delivered by a party by facsimile or email transmission shall be deemed to be an original signature hereto.  Each of the parties hereto explicitly consent to the electronic delivery of the terms of the transactions evidenced by this Amendment.  Each of the parties hereto agree that their present intent to be bound by this Amendment may be evidenced by transmission of digital images of signed signature pages via facsimile, email, SMS or other digital transmission and affirms that such transmission indicates a present intent to be

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bound by the terms of the Amendment and is deemed to be valid execution and delivery as though an original ink or electronic signature.  Loan Parties shall deliver original executed signature pages to Agent, but any failure to do so shall not affect the enforceability of this Amendment.  An electronic image of this Amendment (including signature pages) shall be as effective as an original for all purposes.      

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first above written.

 

 

 

BORROWERS:

 

AOB PRODUCTS COMPANY

 

 

 

 

By:

/s/ H. Andrew Fulmer

 

Name:

H. Andrew Fulmer

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

CRIMSON TRACE CORPORATION

 

 

 

 

By:

/s/ H. Andrew Fulmer

 

Name:

H. Andrew Fulmer

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

 

GUARANTORS:

 

AMERICAN OUTDOOR BRANDS, INC.

 

 

 

 

By:

/s/ H. Andrew Fulmer

 

Name:

H. Andrew Fulmer

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

BATTENFIELD ACQUISITION COMPANY INC.

 

 

 

 

By:

/s/ H. Andrew Fulmer

 

Name:

H. Andrew Fulmer

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

BTI TOOLS, LLC

 

 

 

 

By:

/s/ H. Andrew Fulmer

 

Name:

H. Andrew Fulmer

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

ULTIMATE SURVIVAL TECHNOLOGIES, LLC

 

 

 

 

By:

/s/ H. Andrew Fulmer

 

Name:

H. Andrew Fulmer

 

Title:

Chief Financial Officer

 

 

 

 

 

 

 

AOBC ASIA CONSULTING, LLC,

 

 

 

 

By:

/s/ H. Andrew Fulmer

 

Name:

H. Andrew Fulmer

 

Title:

Chief Financial Officer

 

 

 

 

 

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

AGENT AND LENDER:

 

TD BANK, N.A., as Agent, Swingline Lender, Issuing Bank and a Lender

 

 

 

 

By:

/s/ Antimo Barbieri

 

Name:

Antimo Barbieri

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 


 

 

 

Exhibit A to Amendment No.1 Conformed Loan and Security Agreement

 

LOAN AND SECURITY AGREEMENT

 

by and among

 

AOB PRODUCTS COMPANY

and

CRIMSON TRACE CORPORATION

(as Borrowers) and

AMERICAN OUTDOOR BRANDS, INC. BATTENFELD ACQUISITION COMPANY INC. BTI TOOLS, LLC

ULTIMATE SURVIVAL TECHNOLOGIES, LLC

and

AOBC ASIA CONSULTING, LLC

(as Guarantors) and

TD BANK, N.A.

(as a Lender and as Agent) and

THE LENDERS FROM TIME TO TIME HERETO

(as Lenders)

 

 

August 24, 2020

(and amended as of March 25, 2022)

 

 


 

TABLE OF CONTENTS

 

Page

 

 

 

 

1.

DEFINITIONS1

 

1.1

Accounting Terms1

 

1.2

General Terms1

 

1.3

Uniform Commercial Code Terms46/Other Capitalized

Terms50

 

1.4

Certain Matters of Construction4750

 

1.5

Disclaimer of Liability on the LIBOR Benchmark

Rate47Rates

51

 

2.

ADVANCES, PAYMENTS4851

 

2.1

Revolving Advances4851

 

2.2

Procedure for Borrowing4852

 

2.3

Disbursement of Advance Proceeds5154

 

2.4

[Reserved]5155

 

2.5

Repayment of Advances5155

 

2.6

Repayment of Excess Advances5256

 

2.7

Statement of Account5256

 

2.8

Letters of Credit5356

 

2.9

Issuance of Letters of Credit5357

 

2.10

Requirements for Issuance of Letters of Credit5457

 

2.12

Manner of Borrowing and Payment5559

 

2.13

Mandatory Prepayments5761

 

2.14

Use of Proceeds5862

 

2.15

Defaulting Lender/Impacted Lender5962

 

2.16

Joint and Several Liability6064

 

2.17

Interrelated Businesses6165

 

2.18

Appointment of Administrative Loan Party as Agent for Requesting Advances and Letters of Credit and Receipts of Advances and Statements

 

and Receipts and Sending of Notices6265

 

2.19

Increase in Maximum Credit6266

 

3.

INTEREST AND FEES6468

 

3.1

Interest6568

 

3.2

Letter of Credit Fees; Cash Collateral6569

 

3.3

Loan Fees6669

 

3.4

Computation of Interest and Fees6670

 

3.5

Maximum Charges6670

 

 

3.6

Increased Costs6770

 


 

 

3.7

Capital Adequacy6871

 

3.8

Inability to Determine Interest Rate (Temporary)6872

 

3.9

Effect of Benchmark Transition Event6972

 

3.10

Withholding Taxes7274

 

3.11

Illegality74

 

3.12

Requirements of Law75

 

4.

GRANT OF SECURITY INTEREST; COLLATERAL COVENANTS7275

 

4.1

Security Interest in the Collateral7275

 

4.2

Perfection of Security Interest7376

 

4.3

Preservation of Collateral7376

 

4.4

Ownership and Location of Collateral7477

 

4.5

Defense of Agent’s and Lenders’ Interests7477

 

4.6

Books and Records7578

 

4.7

Financial Disclosure7578

 

4.8

Compliance with Laws7578

 

4.9

Inspection of Premises/Appraisals7679

 

4.10

Insurance7679

 

4.11

Failure to Pay Insurance7679

 

4.12

Payment of Taxes7780

 

4.13

Payment of Leasehold Obligations7780

 

4.14

Accounts and other Receivables7780

 

4.15

Inventory8184

 

4.16

Maintenance of Equipment8184

 

4.17

Exculpation of Liability8184

 

4.18

Environmental Matters8285

 

4.19

Financing Statements8386

 

4.20

Grant of Security  Interest  in  Hedging  Contracts  and  Other  Hedging Contracts8386

 

 

4.21

Collateral Field Examinations and Appraisals8487

 

5.

REPRESENTATIONS AND WARRANTIES8588

 

5.1

Authority, Etc8588

 

5.2

Formation and Qualification8588

 

5.3

Survival of Representations and Warranties8689

 

5.4

Tax Returns8689

 

5.5

Financial Statements8689

 

5.6

Corporate Name8790

 

5.7

O.S.H.A. and Environmental Compliance8891

 

5.8

Solvency; No Litigation, Violation of Law; No ERISA Issues8891

 

5.9

Patents, Trademarks, Copyrights and Licenses8992

 

5.10

Licenses and Permits9093

 

5.12

No Burdensome Restrictions/No Liens9093

 

5.13

No Labor Disputes, Etc9194

 

5.14

Margin Regulations9194

 


 

 

5.15

Investment Company Act9194

 

5.16

Disclosure9194

 

5.17

Real Property9295

 

5.18

Hedging Agreements9295

 

5.19

Conflicting Agreements9295

 

5.20

Business and Property of Loan Parties9295

 

5.21

Material Contracts9295

 

5.22

Capital Structure9396

 

5.23

Bank Accounts, Security Accounts, Etc9497

 

5.24

[Reserved]9497

 

5.25

Security Documents; Liens9497

 

5.26

Brokers9598

 

5.27

Customer and Trade Relations9598

 

5.28

Patriot Act9598

 

5.29

OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws9598

 

5.30

Swap Obligations9699

 

6.

AFFIRMATIVE COVENANTS9699

 

6.1

Payment of Fees9699

 

6.2

Conduct of Business; Compliance with Laws and Maintenance of

Existence and Assets9699

 

6.3

Violations97100

 

6.4

Government Receivables97100

 

6.5

Execution of Supplemental Instruments; Further Assurances97100

 

6.6

Payment of Indebtedness98101

 

6.7

Standards of Financial Statements98101

 

6.8

Financial Covenants98101

 

6.9

Factoring Arrangements98101

 

6.10

Post-Closing Obligations98101

 

7.

NEGATIVE COVENANTS99102

 

7.1

Merger, Consolidation, Acquisition and Sale of Assets99102

 

7.2

Creation of Liens101104

 

7.3

Guarantees101104

 

7.4

Investments101104

7.5Loans103106

 

7.6

Capital Expenditures103106

 

7.7

Dividends and Distributions103106

 

7.8

Indebtedness104107

 

7.9

Nature of Business106109

 

7.10

Transactions with Affiliates106109

7.11[Reserved]107110

 

7.12

Subsidiaries107110

 

7.13

Fiscal Year and Accounting Changes107110

 

7.14

Pledge of Credit107110

 

7.15

Amendment of Organizational Documents107110

 


 

 

7.16

Compliance with ERISA108111

 

7.17

Prepayment, Etc. of Money Borrowed108111

 

7.19

Foreign Assets Control Regulations, Etc109112

 

7.20

Burdensome Agreements109112

 

8.

CONDITIONS PRECEDENT109112

 

8.1

Conditions to Initial Advances109112

 

8.2

Conditions to Each Advance113116

 

9.

INFORMATION AS TO LOAN PARTIES114117

 

9.1

Disclosure of Material Matters Pertaining to Collateral114117

 

9.2

Collateral and Related Reports114117

 

9.3

Environmental Reports118121

 

9.4

Litigation118121

 

9.5

Material Occurrences118121

 

9.6

Permitted Factored Accounts118121

 

9.10

Notices re Equity Holders121124

 

9.11

Additional Information121124

 

9.12

Projected Operating Budget121124

 

9.13

Variances From Operating Budget121124

 

9.14

Notice of Governmental Body Items122125

 

9.15

ERISA Notices and Requests122125

 

9.16

Notice of Change in Management, Etc123126

 

9.17

Additional Documents123126

 

10.

EVENTS OF DEFAULT123126

 

11.

LENDERS’ RIGHTS AND REMEDIES AFTER EVENT OF DEFAULT126129

 

11.1

Rights and Remedies126129

 

11.2

Waterfall127130

 

11.3

Agent’s Discretion128131

11.4Setoff128131

 

11.5

Rights and Remedies not Exclusive128131

 

11.6

Commercial Reasonableness128131

 

12.

WAIVERS AND JUDICIAL PROCEEDINGS129132

 

12.1

Waiver of Notice129132

12.2Delay129132

 

12.3

Jury Waiver129132

 


 

13.

EFFECTIVE DATE AND TERMINATION130133

 

13.1Term130133

13.2Termination130133

14.

REGARDING AGENT130133

 

 

14.1

Appointment130133

 

14.2

Nature of Duties131134

 

14.3

Lack of Reliance on Agent and Resignation131134

 

14.4

Certain Rights of Agent132135

 

14.5

Reliance132135

 

14.6

Notice of Default133136

 

14.7

Indemnification133136

 

14.8

Agent in its Individual Capacity133136

 

14.9

Actions in Concert134137

 

14.11

Delegation of Duties135138

 

14.12

Collateral and Guarantees135138

 

14.13

Notice of Transfer135138

 

14.14

Reports and Financial Statements135138

 

14.15

Agency for Perfection136139

 

14.16

Relation among Lenders136139

15.

GUARANTEE136139

 

 

15.1

Guarantee; Contribution Rights136139

 

15.2

Waivers137140

 

15.3

No Defense137140

 

15.4

Guarantee of Payment137140

 

15.5

Liabilities Absolute138141

 

15.6

Waiver of Notice139142

 

15.7

Agent’s Discretion139142

 

15.8

Reinstatement139142

 

15.10

Action Upon Event of Default140143

 

15.11

Statute of Limitations141144

 

15.12

Interest141144

 

15.13

Guarantor’s Investigation141144

 

15.14

Termination142145

 

15.15

Extension of Guarantee142145

 

15.16

Applicability to Borrowers142145

(v)

 

16.

MISCELLANEOUS142145

 

16.1

Governing Law; Consent to Jurisdiction; Etc142145

 

16.2

Entire Understanding; Amendments; Lender Replacements; Overadvances143146

16.3Successors and Assigns; Participations; New Lenders; Taxes; Syndication145148 16.4Application of Payments148151

 


 

16.5Indemnity/Currency Indemnity149152

16.6Notice150153

 

16.7

Survival150153

 

16.8

Postponement of Subrogation, Etc. Rights150153

 

16.9

Severability151154

 

16.10

Expenses151154

 

16.11

Injunctive Relief151154

 

16.12

Consequential Damages152155

 

16.13

Captions152155

 

16.14

Counterparts; Facsimile or Emailed Signatures; Electronic Delivery152155

 

16.15

Construction152155

 

16.16

Confidentiality; Sharing Information152155

 

16.17

Publicity153156

 

16.18

Patriot Act Notice153156

 

16.19

Agent Titles153156

 

16.20

Keepwell154157

 

16.21

Acknowledgment and Consent to Bail-In of EEA Financial Institutions154157

 

 

16.22

Erroneous Payments157

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(vi)

 

 


 

 

List of Exhibits and Schedules Exhibits

Exhibit AForm of Borrowing Base Certificate

Exhibit BForm of Notice of Conversion

Exhibit CForm of Notice of Advance Request

Exhibit 5.5Financial Projections

Exhibit 9.7Form of Compliance Certificate

Exhibit 16.3Form of Commitment Transfer Supplement

 

Schedules

 

Schedule C-1Commitments

Schedule R-1Real Property

Schedule 2.3Payment Account; Disbursements of Advance Proceeds

Schedule 4.4Equipment, Inventory and Books and Records Locations

Schedule 4.14(c)Location of Chief Executive Offices

Schedule 5.2(a)Jurisdictions of Qualification and Good Standing

Schedule 5.2(b)Subsidiaries

Schedule 5.4Federal Tax Identification Number

Schedule 5.6Corporate Names

Schedule 5.8(b)(i)Litigation / Commercial Tort Claims / Money Borrowed Schedule 5.8(d)(i)Plans

Schedule 5.9Intellectual Property, Source Code Escrow Agreements

Schedule 5.13Labor Disputes

Schedule 5.18Hedging Agreements

Schedule 5.21Material Contracts

Schedule 5.22Capital Structure

Schedule 5.23Bank Accounts; Credit Card Arrangements

Schedule 5.25Filing Offices

Schedule 6.10Post-Closing Obligations

Schedule 7.2Existing Liens

Schedule 7.8Existing Indebtedness

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-i-

 

 


 

 

LOAN AND SECURITY AGREEMENT

 

This LOAN AND SECURITY AGREEMENT (this “Agreement”), dated August 24, 2020, is entered into by and among AOB PRODUCTS COMPANY, a corporation organized under the laws of the State of Missouri (“AOB Products”), CRIMSON TRACE CORPORATION, a corporation organized under the laws of the State of Oregon (“Crimson”; and together with AOB Products and any other Person that at any time after the date hereof becomes a Borrower, each a “Borrower” and collectively, the “Borrowers”), AMERICAN OUTDOOR BRANDS, INC., a corporation organized under the laws of the State of Delaware (“Parent”), BATTENFELD ACQUISITION COMPANY INC, a corporation organized under the laws of the State of Delaware (“Battenfeld”), BTI TOOLS, LLC, a limited liability company organized under the laws of the State of Delaware (“BTI”), ULTIMATE SURVIVAL TECHNOLOGIES, LLC, a limited liability company organized under the laws of the State of Delaware (“UST”), AOBC ASIA CONSULTING, LLC, a limited liability company organized under the laws of the State of Delaware (“AOBC Asia”; and together with Parent, Battenfeld, BTI, UST and any other Person that at any time after the date hereof becomes a Guarantor, each a “Guarantor” and collectively, the “Guarantors”), the lenders which are now or which hereafter become a party hereto (each a “Lender” and collectively, the “Lenders”) and TD BANK, N.A., a national banking association (in its individual capacity, “TD Bank”), in its capacity as agent (TD Bank, in such capacity, “Agent”) for Secured Parties (as hereinafter defined).

 

IN CONSIDERATION of the mutual covenants and undertakings herein contained, Loan Parties, Lenders and Agent hereby agree as follows:

 

 

1.

DEFINITIONS.

 

 

1.1

Accounting Terms.

 

As used in this Agreement, the Note(s), any Other Document, or any certificate, report or other document made or delivered pursuant to this Agreement, accounting terms not defined in Section 1.2 or elsewhere in this Agreement and accounting terms partly defined in Section 1.2 to the extent not defined, shall have the respective meanings given to them under GAAP.

 

 

1.2

General Terms.

 

For purposes of this Agreement the following terms shall have the following meanings: “Accountants” shall have the meaning set forth in Section 9.7.

“Accounts” shall mean and include as to each Loan Party and each of its Subsidiaries, all of such Loan Party’s and Subsidiary’s “accounts” as defined in the UCC, whether now owned or hereafter acquired including, without limitation all present and future rights of such Loan Party to payment of a monetary obligation, whether or not earned by performance, which is not evidenced by chattel paper or an instrument, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, (c) for a secondary obligation incurred or to be incurred, or (d) arising out of the use of a credit or charge card or information contained on or for use with any such card.

 

03/12/2020

 

 


 

“Acquisition Pro Forma” shall have the meaning set forth in the definition of Permitted Acquisition.

 

“Adjusted LIBOR Rate” shall mean for the Interest Period for each LIBOR Rate Loan comprising part of the same borrowing (including conversions, extensions and renewals), a per annum interest rate determined pursuant to the following formula:

 

Adjusted LIBOR Rate =LIBOR

1 – LIBOR Reserve Percentage

 

“Administrative Loan Party” shall mean Parent, in its capacity as Administrative Loan Party on behalf of itself and the other Borrowers pursuant to Section 2.18 hereof, and its successors and assigns in such capacity.

 

“Advances” shall mean the Revolving Advances (including without limitation the Protective Advances) and Swingline Loan Advances, or any of them as the context implies.

 

“Advance Rates” shall mean the lending formula percentages set forth in the definition of Borrowing Base.

 

“Affiliate” of any Person shall mean (a) any Person (other than a Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, or (b) any Person who is a director, manager or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the power, direct or indirect, (A) to vote ten (10%) percent or more of the Equity Interests having ordinary voting power for the election of directors or managers (or other comparable body) of such Person, or (B) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

“Affiliate Counterparty” shall mean a Person who is an Affiliate of Agent at the time such Person entered into any Hedging Agreement.

 

“Agent” shall have the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.

“Agent Assignee” shall have the meaning specified therefor in Section 16.22(d). “Agreement” shall mean this Loan and Security Agreement, as amended, restated,

modified and supplemented from time to time.

 

“Agreement Regarding Licensed Products and Other Inventory” shall mean the Agreement Regarding Licensed Products and Other Inventory dated on or about the date hereof, among Smith & Wesson Brands, Inc. and Agent and acknowledged by AOB Products and Crimson.

 

“Amendment No. 1” shall mean the Amendment No. 1 to Credit Agreement, dated as of the Amendment No. 1 Effective Date, among Borrowers, Guarantors, Agent and Lenders.

 

2

 

 


 

“Amendment No. 1 Effective Date” shall mean the date on which each of the conditions precedent to the effectiveness of Amendment No. 1 has been fully satisfied, as determined by Agent.

 

“Ammunition” shall mean complete rounds/cartridges or their components, bullets, shells or other projectiles, cartridge cases, primers/caps and other propellants and ammunition used in connection with any Firearm.

 

“Applicable Margin” for each type of Advance shall mean, at any time:

 

(a)subject to clause (b) below, the applicable percentage (on a per annum basis) set forth in the chart below for Base Rate Loans and for LIBOR RateSOFR Loans, respectively, that will result, in accordance with such chart, if the Quarterly Average Excess Availability for the immediately preceding calendar quarter is in an amount within the range indicated in the chart below for such percentage:

 

 

 

Tier

 

Quarterly Average Excess Availability

Applicable Margin for Base Rate Loans

Applicable Margin for LIBOR RateSOFR Loans

I

Greater than or equal to 50% of the Line Cap

0.750.25%

1.751.25%

II

Greater than 25% of the Line Cap but less than 50% of the Line Cap

1.000.50%

2.001.50%

III

Equal to or less than 25% of the Line Cap

1.250.75%

2.251.75%

 

(b)Notwithstanding anything to the contrary set forth in clause (a) above, (i) from the ClosingAmendment No. 1 Effective Date through and including December 31June 30, 20202022, the Applicable Margin for the interest rate for Base Rate Loans and for LIBOR RateSOFR Loans shall be the applicable percentage calculated based on the percentage set forth in Tier III set forth above, and for each calendar quarter thereafter, the interest rate will be adjusted quarterly for each calendar quarter thereafter, on the first (1st) day of each calendar quarter, based on the Quarterly Average Excess Availability and the chart set forth above, (ii) the Applicable Margin shall be calculated and established once each calendar quarter, based upon the Quarterly Average Excess Availability for the immediately preceding calendar quarter and shall remain in effect until adjusted thereafter (if applicable) at the beginning of the next calendar quarter, and (iii) each adjustment of the Applicable Margin shall be effective as of the first (1st) day of a calendar quarter based on the Quarterly Average Excess Availability for the immediately preceding calendar quarter. In the event that at any time after the end of a calendar quarter the Quarterly Average Excess Availability for the prior calendar quarter used for the determination of the Applicable Margin of such recently ended calendar quarter was less than the actual amount of the Quarterly Average Excess Availability for such prior calendar quarter, the Applicable Margin of such recently ended calendar quarter shall be adjusted to the applicable percentage based on such actual Quarterly Average Excess Availability , as determined by Agent, and any additional interest for the applicable period as a result of such recalculation shall be promptly paid to Agent.

 

3

 

 


 

“Anti-Corruption Laws” means the FCPA, the U.K. Bribery Act of 2010, as amended, and all other applicable laws and regulations or ordinances concerning or relating to bribery, money laundering or corruption in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business.

 

“Anti-Money Laundering Laws” means the applicable laws or regulations in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business that relates to money laundering, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto.

 

“Approved Fund” shall mean (a) any fund, trust or similar entity that invests in commercial loans in the ordinary course of business and is advised or managed by (i) a Lender, (ii) a Controlled Affiliate of a Lender, (iii) the same investment advisor that manages a Lender or (iv) a Controlled Affiliate of an investment advisor that manages a Lender or (b) any finance company, insurance company or other financial institution which temporarily warehouses loans for any Lender or any Person described in clause (a) above.

 

“Authority” shall have the meaning set forth in Section 4.18(d).

 

“Available Tenor” shall mean, as of any date of determination and with respect to the then- current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is removed from the definition of “Interest Period” pursuant to Section 3.9(d).

 

“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.

 

“Bank Product Agreement” shall mean those agreements entered into from time to time by any Loan Party or its Subsidiaries with a Bank Product Provider in connection with the obtaining of any of the Bank Products.

 

“Bank Product” shall mean any service or facility extended to any Loan Party by a Bank Product Provider including: (a) credit cards, (b) debit cards, (c) purchase cards, (d) credit card, debit card and purchase card processing services, (e) treasury, cash management or related services (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system), (f) cash management, including controlled disbursement, accounts or services, (g) return items, netting, overdraft and interstate depositary network services or (h) Hedging Agreements.

 

4

 

 


 

“Bank Product Obligations” shall mean all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by any Loan Party to a Bank Product Provider pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all such amounts that any Loan Party is obligated to reimburse to a Bank Product Provider as a result of such Person purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products provided to any Loan Party pursuant to the Bank Product Agreements.

 

“Bank Product Provider” shall mean (a) TD Bank or any of its Affiliates or (b) any Lender or any Affiliate of any Lender (in each case as to any Lender or any Affiliate of any Lender, to the extent approved by Agent in its Permitted Discretion) that provides any Bank Products to any Loan Party.

 

“Bankruptcy Code” shall have the meaning set forth in Section 2.16(a).

 

“Base Rate” shall mean, for any day (or if such day is not a Business Day, the immediately preceding Business Day), a rate per annum (rounded upward, if necessary, to the next 1/100th of one (1%) percent) equal to the greater of (a) the greater of (i) one-half of one percent (0.50%) and

(ii)the Prime Rate, and (b) the greater of (i) one-half of one percent (0.50%) and (ii) the Federal Funds Effective Rate in effect on such day plus one-half of one percentage point (0.50%). If Agent shall have determined in its reasonable discretion (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the Base Rate shall be determined without regard to clause (b) of the preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. The term “Federal Funds Effective Rate” shall mean, for any period, a fluctuating interest rate per annum equal, for each day during such period, to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not published for any day that is a Business Day, the average of the quotations for such day on such transactions received by Agent from three Federal Funds brokers of recognized standing selected by Agent.

 

“Base Rate Loan” shall mean any Advance that bears interest based upon the Base Rate. "Benchmark Replacement" shall have the meaning set forth in Section 3.9.  "Benchmark Replacement Adjustment" shall have the meaning set forth in Section 3.9.

“Benchmark” shall mean initially, with respect to any SOFR Loan, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the Term SOFR Reference Rate or the then- current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the

 

5

 

 


 

extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 3.9(a).

 

“Benchmark Replacement” shall mean, with respect to any Benchmark Transition Event the sum of: (i) the greater of (x) the alternate benchmark rate that has been selected by Agent giving due consideration to (A) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (B) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for U.S. dollar-denominated commercial credit facilities and (y) the Floor and (ii) the related Benchmark Replacement Adjustment.

 

“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Available Tenor, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Agent giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated commercial credit facilities.

 

"Benchmark Replacement Conforming Changes" shall have the meaning set forth in Section 3.9.” shall mean, 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” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of Section 3.8 and other technical, administrative or operational matters) that Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Agent in a manner substantially consistent with market practice (or, if Agent decides that adoption of any portion of such market practice is not administratively feasible or if Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Other Documents).

"Benchmark Replacement Date" shall have the meaning set forth in Section 3.9. "Benchmark Transition Event" shall have the meaning set forth in Section 3.9. “Benchmark Replacement Date” shall mean, with respect to any Benchmark, the earliest

to occur of the following events with respect to such then-current Benchmark:

 

(1)in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and

 

6

 

 


 

(b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or

 

(2)in the case of clause (3) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by or on behalf of the administrator of such Benchmark (or such component thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative or not to comply with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks; provided, that such non-representativeness or non-compliance will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

 

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

 

“Benchmark Transition Event” shall mean, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:

 

(1)a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), 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 such component thereof);

 

(2)a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) 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 such component thereof); or

 

(3)a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) announcing that

 

7

 

 


 

all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative or do not, or as a specified future date will not, comply with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks.

 

For the avoidance of doubt, the “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

 

"Benchmark Transition Start Date" shall have the meaning set forth in Section 3.9. shall mean, in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).

 

"Benchmark Unavailability Period" shall have the meaning set forth in Section 3.9. shall mean, with respect to any Benchmark, the period (if any) (i) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Other Document in accordance with Section 3.9 and (ii) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Other Document in accordance with Section 2.

 

“Benefited Lender” shall have the meaning set forth in Section 2.12(f). “Blocked Accounts” shall have the meaning set forth in Section 4.14(h).

“Borrower” or “Borrowers” shall have the meanings set forth in the preamble to this Agreement and shall extend to all permitted successors and assigns of such Persons.

 

“Borrowers’ Account” shall have the meaning set forth in Section 2.7. “Borrowing Base” shall mean, at any time, the amount equal to:

 

(a)

eighty-five (85%) percent multiplied by the face amount of Eligible

Accounts, plus

 

 

(b)

the amount equal to the lesser of (i) sixty-five (65%) percent of the Value

of the Eligible Inventory and (iii) eighty-five (85%) percent of the Net Liquidation Percentage multiplied by the Value of the Eligible Inventory, minus

 

 

(c)

Reserves;

 

8

 

 


 

provided, however, that the aggregate amount of Eligible Inventory included in the Borrowing Base on any given date pursuant to clauses (b) above shall not exceed sixty-five (65%) percent of Borrowing Base as of such date.

 

“Borrowing Base Certificate” shall mean a certificate duly executed by a Responsible Officer of Administrative Loan Party appropriately completed and in substantially the form of Exhibit A, as such form may from time to time be modified by Agent (in consultation with Administrative Loan Party) in a manner consistent with the terms of this Agreement.

 

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks under the laws of the State of New York, the State of New Jersey or the State of New Hampshire are authorized or required by law to close, and, if the applicable Business Day relates to any LIBOR Rate Loan, a day on which dealings are carried on in the London interbank market.provided that, when used in connection with a SOFR Loan, or any other calculation or determination involving SOFR, the term “Business Day” means a U.S. Government Securities Day.

 

“Capital Expenditures” shall mean, with respect to any Person, without duplication, all expenditures (including deposits) made by such Person for, or contracts for expenditures with respect to any fixed assets or improvements, or for replacements, substitutions or additions thereto, which have a useful life of more than one (1) year, including the direct or indirect acquisition of such assets by way of increased product or service charges, offset items or otherwise, as determined in accordance GAAP consistently applied and all other expenditures which, in accordance with GAAP, would be required to be capitalized and shown on the consolidated balance sheet of such Person.

 

“Capital Lease” shall mean any lease of any property (whether real, personal or mixed) that, in conformity with GAAP consistently applied, should be accounted for as a capital lease.

 

“Cash Dominion Event” shall mean (a) the occurrence and continuance of a Specified Event of Default or (b) if Excess Availability is less than the greater of (i) 12.5% of the Line Cap and (ii) $5,000,0007,500,000; provided, that (A) if a Cash Dominion Event has occurred due to clause (a) above, if no Specified Events of Default exists for at least 30 consecutive days, such Cash Dominion Event shall no longer be deemed to exist or be continuing; and (B) if a Cash Dominion Event has occurred due to clause (b) above, if the Excess Availability shall be greater than the greater of (1) 12.5% of the Line Cap and (2) $5,000,0007,500,000 for at least 30 consecutive days, such Cash Dominion Event shall no longer be deemed to exist or be continuing,

 

“Cash Equivalents” shall mean: (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one (1) year from the date of acquisition thereof; (b) commercial paper maturing no more than six (6) months from the date issued and, at the time of acquisition, having a rating of at least A-1 from Standard & Poor’s Corporation or at least P-1 from Moody’s Investors Service, Inc.; (c) certificates of deposit or bankers’ acceptances maturing within one (1) year from the date of issuance thereof issued by, or overnight reverse repurchase agreements from, any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia having combined

 

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capital and surplus of not less than $500,000,000 and whose debt obligations, or those of a holding company of which it is a Subsidiary, are rated not less than A (or the equivalent rating) by a nationally recognized investment rating agency (an “A Rated Bank”); (d) time deposits maturing no more than thirty (30) days from the date of creation thereof with A Rated Banks; (e) mutual funds that invest solely in one or more of the investments described in clauses (a) through (d) above; and (f) with respect to such investments in currencies other than Dollars or in jurisdictions other than the United States, other investments reasonably deemed by a Loan Party to be equivalent to the investments described in clauses (a) through (e) above.

 

“Cash Interest Expense” shall mean, without duplication, for any period, Interest Expense (excluding the following non-cash components of Interest Expense: (a) the amortization of fees and costs with respect to the transactions contemplated by this Agreement which have been capitalized as transaction costs, and (b) interest paid in kind).

 

“Cash Receipt Account” or “Cash Receipt Accounts” shall mean, individually or collectively, all lockbox accounts, dominion accounts or other deposit accounts established and maintained by Loan Parties for the purpose of collecting or depositing cash, checks, notes, instruments, and other items of payment (including insurance proceeds, cash proceeds of asset sales, rental proceeds, and tax refunds), and which are designated as such and listed  on  Schedule 5.23.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.

“CFC” shall mean a “controlled foreign corporation” as defined in Section 957 of the Code. “Change in Tax Law” shall mean a change in the treaty, law or regulation after the date on

which the applicable Agent or Lender becomes a party to this Agreement (or, if such Lender is a non-U.S. intermediary or flow-through entity for U.S. federal income tax purposes, after the relevant beneficiary or member of such Lender became such a beneficiary or member, if later); provided, however, such term does not include regulations or other guidance issued by the IRS or

U.S. Treasury implementing or interpreting laws already enacted, but not yet effective. “Change of Control” shall mean an event or series of events by which:

(a)any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of thirty-three percent (33%) or more of the Equity Interests of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent on a fully-diluted basis (and taking into account all such Equity Interests that such “person” or “group” has the right to acquire pursuant to any option right); or

 

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(b)during any period of twenty-four (24) consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Parent cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or

 

(c)any “change in control” as defined in any formation or governance documents of any Loan Party or in any Material Contract, or any document governing any material Indebtedness of any Loan Party; or

 

(d)the Parent fails at any time to own, directly or indirectly, 100% of the Equity Interests of each other Loan Party (other than the Parent) free and clear of all Liens (other than the Liens in favor of the Agent), except where such failure is as a result of a transaction permitted by this Agreement or the Other Documents.

 

“Charges” shall mean all taxes, charges, fees, imposts, levies or other assessments, including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties, fees, assessments, Liens, claims and charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts, imposed by any taxing or other authority, domestic or foreign (including, without limitation, the PBGC or any environmental agency or superfund), upon the Collateral, any Loan Party or any Subsidiary of any Loan Party.

 

“Closing Date” shall mean August 24, 2020.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time and the regulations promulgated thereunder.

 

“Collateral” shall mean any and all collateral granted under this Agreement or any Other Document to secure any and all of the Obligations, including without limitation all tangible and intangible property of each Loan Party, all personal and real property of each Loan Party, all movable and immovable property of each Loan Party, in each case whether now owned or hereafter acquired and wherever located, including, but not limited to, the following of each Loan Party:

 

 

(a)

all Accounts and other Receivables;

 

 

(b)

all certificated and uncertificated securities;

 

 

(c)

all chattel paper, including electronic chattel paper;

 

(d)all Computer Hardware and Software and all rights with respect thereto, including, any and all licenses, options, warranties, service contracts, program services, test rights,

 

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maintenance rights, supporting information, improvement rights, renewal rights and indemnifications, and any substitutions, replacements, additions or model conversions of any of the foregoing;

 

 

(e)

all Contract Rights;

 

(f)all commercial tort claims, (including, without limitation any commercial tort claims from time to time described on Schedule 5.8(b)(i) (as such Schedule 5.8(b)(i) may from time to time be updated));

 

 

(g)

all deposit accounts;

 

 

(h)

all documents;

 

 

(i)

all financial assets;

 

 

(j)

all General Intangibles, including payment intangibles and software;

 

(k)all goods (including all Equipment and Inventory), and all embedded software, accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor;

 

 

(l)

all instruments;

 

 

(m)

all Intellectual Property;

 

 

(n)

all Investment Property;

 

(o)all of the Equity Interests issued by each Loan Party (other than Parent) and each of their Subsidiaries;

 

 

(p)

all leasehold interests;

 

 

(q)

all cash, cash equivalents or other money;

 

 

(r)

all letter of credit rights;

 

 

(s)

all security entitlements;

 

 

(t)

all supporting obligations;

 

(u)all of each Loan Party’s right, title and interest in and to (i) all of its respective goods and other property including, but not limited to, all merchandise returned or rejected by Customers, relating to or securing any of the Receivables; (ii) all of each Loan Party’s rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, compensation, detinue, replevin, reclamation and repurchase; (iii) all supporting obligations and all additional amounts due to any Loan Party from any Customer relating to the Receivables; (iv) all other property of any kind whatsoever of each Loan Party, including, but not limited to, warranty claims, relating to any goods; (v) all of each Loan Party’s

 

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Contract Rights, rights of payment which have been earned under a Contract Right, letter of credit rights (whether or not the letter of credit is evidenced by a writing), instruments (including promissory notes), documents, chattel paper (whether tangible or electronic), warehouse receipts, deposit accounts, money and securities; (vi) if and when obtained by any Loan Party, all real, immovable, movable and personal property of third parties in which such Loan Party has been granted a Lien; and (vii) any other goods, movable or personal property or real or immovable property of any kind or description, wherever located, now or hereafter owned or acquired by any Loan Party; and

 

(v)all books, records, writings, data bases, information and other property relating to, used or useful in connection with, or evidencing, embodying, incorporating or referring to any of the foregoing, and all proceeds, products, offspring, rents, issues, profits and returns of and from any of the foregoing;

 

provided, however, that, no Excluded Assets shall be included in Collateral.

 

“Collateral Access Agreement” shall mean an agreement in writing, in form and substance reasonably satisfactory to Agent, from any lessor of premises to any Loan Party, or any other Person to whom any Collateral is consigned or who has custody, control or possession of any such Collateral or is otherwise the owner or operator of any premises on which any of such Collateral is located, duly executed and delivered in favor of Agent with respect to the Collateral at such premises or otherwise in the custody, control or possession of such lessor, consignee or other Person.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

“Commitment” shall mean, with respect to each Lender, its Revolver Commitment or its Swingline Loan Commitment, as the context requires, and, with respect to all Lenders, their Revolver Commitments or their Swingline Loan Commitments, as the context requires, in each case as such Dollar amounts are set forth beside such Lender’s name under the applicable heading on Schedule C-1 or in the Commitment Transfer Supplement pursuant to which such Lender became a Lender hereunder, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of this Agreement (including, without limitation, pursuant to any increase contemplated under Section 2.19).

 

“Commitment Percentage” shall mean, with respect to a Lender’s obligation to make Revolving Advances and participate in Letters of Credit and in the Swingline Loan Advances, and right to receive payments of principal, interest and fees with respect thereto, (a) prior to the Revolver Commitments being terminated or reduced to zero, the percentage obtained by dividing

(i)such Lender’s Revolver Commitment, by (ii) the aggregate Revolver Commitments of all Lenders, and (b) from and after the time that the Revolver Commitments have been terminated or reduced to zero, the percentage obtained by dividing (i) the outstanding principal amount of such Lender’s Revolving Advances and ratable portion in Swingline Loan Advances and in Letters of Credit by (ii) the outstanding principal amount of all Revolving Advances made by Lenders (inclusive of all Swingline Loan Advances made by Swingline Lender and all Letters of Credit.

 

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“Commitment Transfer Supplement” shall mean a document in the form of Exhibit 16.3, properly completed, or otherwise in form and substance reasonably satisfactory to Agent, and if applicable, to Administrative Loan Party, by which a Purchasing Lender purchases and assumes all or a portion of Advances made by a Lender and/or all or a portion of the Commitments of a Lender.

 

“Compliance Certificate” shall mean the Compliance Certificate executed and delivered by a Responsible Officer of Administrative Loan Party’s pursuant to Sections 9.7, 9.8 and 9.9 in the form of Exhibit 9.7 appended hereto.

 

“Computer Hardware and Software” shall mean all of each Loan Party’s and each of its Subsidiary’s rights (including rights as licensee and lessee) with respect to (a) computer and other electronic data processing hardware, including all integrated computer systems, central processing units, memory units, display terminals, printers, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware; (b) all software and all software programs designed for use on the computers and electronic data processing hardware described in clause (a) above, including all operating system software, utilities and application programs in whatsoever form (source code and object code in magnetic tape, disk or hard copy format or any other listings whatsoever); (c) any firmware associated with any of the foregoing; and (d) any documentation for hardware, software and firmware described in clauses (a), (b) and (c) above, including flow charts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes.

 

“Consents” shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Bodies and other third parties, domestic or foreign, necessary to carry on any Loan Party’s business or to permit the effectuation and performance of this Agreement and the Other Documents, including, without limitation, any Consents required under all applicable federal, state or other applicable law.

 

“Contra Claims” shall have the meaning set forth in subparagraph (l) of the definition of Eligible Accounts.

 

“Contract Right” shall mean any right of each Loan Party to payment under a contract for the sale or lease of goods or the rendering of services, which right is at the time not yet earned by performance.

 

“Control Notice” shall mean a written notice delivered by Agent pursuant to a “control” or other agreements instructing the depository bank to comply with instructions originated by Agent with respect to the Blocked Account that is covered thereby without further consent of Loan Parties.

 

“Controlled Affiliate” of any Person shall mean any Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person. For purposes of this definition, control of a Person shall mean the power, direct or indirect, to (a) vote fifty-one (51%) percent or more of the Equity Interests having ordinary voting power for the election of directors or managers (or other comparable body) of such Person, and (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

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“Controlled Group” shall mean all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with any Loan Party, are treated as a single employer under Section 414 of the Code.

 

“Covenant Trigger Period” shall mean any period (a) beginning on the date on which Excess Availability is less than the greater of (i) 15% of the Line Cap and (ii)

$7,000,00010,500,000, and (b) ending on the date on which Excess Availability is equal to or greater than the greater of (i) 15% of the Line Cap and (ii) $7,000,00010,500,000, in either case, for each day during a period of thirty (30) consecutive days.

 

“Credit Card Issuer” shall mean any person (other than a Borrower or other Loan Party) who issues or whose members issue credit cards, including, without limitation, MasterCard or VISA bank credit or debit cards or other bank credit or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc. or Visa International and American Express, Discover, Diners Club, Carte Blanche and other non-bank credit or debit cards, including, without limitation, credit or debit cards issued by or through American Express Travel Related Services Company, Inc., and Novus Services, Inc. and other issuers approved by the Agent.

 

“Credit Card Processor” shall mean any servicing or processing agent or any factor or financial intermediary who facilitates, services, processes or manages the credit authorization, billing transfer and/or payment procedures with respect to any Borrower’s sales transactions involving credit card or debit card purchases by customers using credit cards or debit cards issued by any Credit Card Issuer.

 

“Credit Card Notifications Agreements” has the meaning provided in Section 4.14(i). “Currency Due” shall have the meaning set forth in Section 16.5.

“Customer” shall mean and include the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or Contract Right, and/or any party who enters into or proposes to enter into any contract or other arrangement with any Loan Party, pursuant to which such Loan Party is to deliver any personal property or perform any services.

 

“Customs” shall mean the United States of America Customs and Border Protection Agency of the United States Department of Homeland Security.

 

“Default” shall mean an event which, with the giving of notice or passage of time or both, would constitute an Event of Default.

 

“Default Rate” shall have the meaning set forth in Section 3.1. “Defaulting Lender” shall have the meaning set forth in Section 2.15(a).

“Depository Accounts” shall have the meaning set forth in Section 4.14(h).

 

“Disposition” shall have the meaning set forth in Section 7.1; and “Dispose” shall have the correlative meaning.

 

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“Disqualified Equity Interests” means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are exchangeable), or upon the happening of any event or condition (a) matures or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provide for the scheduled payments of dividends in cash, or (d) are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 180 days after the Original Term.

 

"Division Series Transaction" means with respect to any Loan Party and Subsidiary of any Loan Party any transaction event or occurrence pursuant to which a Loan Party of or any Subsidiary of a Loan Party (a) divides into two or more Persons (whether or not the original Borrower or Subsidiary survives such division) or (b) creates or reorganizes into one or more series in each case as contemplated under the laws of any jurisdiction.

“Dollar” and the sign “$” shall mean lawful money of the United States of America. “Dollar Equivalent” shall mean, at any time, (a) as to any amount denominated in Dollars,

the amount thereof at such time, and (b) as to any amount denominated in a currency other than Dollars, the equivalent amount in Dollars as reasonably determined by Agent at such time that such amount could be converted into Dollars by Agent according to prevailing exchange rates selected by Agent.

 

"Early Opt-In Election" shall have the meaning set forth in Section 3.9.

 

“EBITDA” shall mean for any period, without duplication, the total of the following for Loan Parties and their Subsidiaries on a consolidated basis, each calculated for such period:

 

 

(a)

Net Income; plus

 

(b)without duplication, to the extent deducted in the calculation of Net Income, the sum of (i) income and franchise taxes paid or accrued, (ii) Interest Expense, net of interest income, paid or accrued, (iii) amortization and depreciation; and (iv) non-cash charges related to the impairment of goodwill; plus

 

(c)without duplication, to the extent deducted in the calculation of Net Income, the sum of (i) non-cash expenses, (ii) extraordinary or non-recurring losses, and (iii) losses from sales or other dispositions of assets (other than sales of Inventory in the normal course of business); less

 

(d)without duplication, to the extent included in the calculation of Net Income, the sum of (i) the income of any Person (other than a Loan Party or a Subsidiary of any Loan Party) in which any Loan Party or a Subsidiary of any Loan Party has an ownership interest except to the

 

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extent such income is received by any Loan Party or such Subsidiary in a cash distribution during such period, (ii) non-cash income, (iii) gains from sales or other dispositions of assets (other than sales of Inventory in the normal course of business), and (iv) extraordinary or non-recurring gains; provided, however, positive contributions to EBITDA from any Non-US Subsidiary that is not a Loan Party shall be disregarded;

 

provided further, that, the aggregate amount of adjustments pursuant to clauses (c) and (d) above shall not exceed for any period, ten (10%) percent of EBITDA for such period (calculated without considering the adjustments from clauses (c) and (d) for such period).

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority,

(b)any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

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

 

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“Eligible Accounts” shall mean and include each Account of a Borrower arising in the ordinary course of such Borrower’s business and which Agent, in its Permitted Discretion shall deem to be an Eligible Account, based on such considerations as Agent may from time to time deem appropriate in its Permitted Discretion. In addition, without limiting the foregoing, in no event shall an Account be an Eligible Account if:

 

(a)it does not arise from the actual and bona fide sale and delivery of goods or rendition of services by such Borrower in the ordinary course of business of such Borrower, which transactions are completed in accordance in all material respects with the terms and provisions contained in any agreement binding on such Borrower or the other party or parties thereto;

 

(b)(i) for any Customer which is not Investment Grade, it is due or unpaid more than the earlier of (A) sixty (60) days after the original due date and (B) ninety (90) days after the original invoice date, (ii) for any Customer which is an Investment Grade Non-Automotive Retail Customer, it is due or unpaid more than the earlier of (A) sixty (60) days after the original due date and (B) one hundred and fifty (150) days after the original invoice date, and (iii) for any Customer which is an Investment Grade Automotive Retail Customer, it is due or unpaid more than three hundred and sixty-five (365) days after the original invoice date;

 

(c)it is owed by (i) a non-Investment Grade Non-Automotive Retail Customer who has Accounts that are otherwise eligible under clause (b) above but which unpaid Accounts constitute more than fifty (50%) percent of the total Accounts of such Customer (such percentage may, in Agent’s sole discretion, be increased or decreased from time to time), or (ii) an Investment

 

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Grade Non-Automotive Retail Customer who has Accounts that are otherwise eligible under clause (b) above but which unpaid Accounts constitute more than twenty-five (25%) percent of the total Accounts of such Customer (such percentage may, in Agent’s sole discretion, be increased or decreased from time to time);

 

(d)the Customer in respect of such Account is a Sanctioned Person or a Sanctioned Entity;

 

(e)it is not subject to the first priority, valid and perfected Lien of Agent (subject to Permitted Encumbrances having priority by operation of law; but without limiting the right of Agent to establish any Reserves with respect to Permitted Encumbrances);

 

(f)it is subject to any Lien other than the first priority security interest therein of Agent, except to the extent acceptable to Agent in its Permitted Discretion;

 

(g)any covenant, representation or warranty contained in this Agreement with respect to such Account has been breached in any material respect;

 

(h)the Customer shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, administrator or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state, federal or other bankruptcy or insolvency laws (as now or hereafter in effect), or enter into discussions with its creditors existing at any one time with respect to rescheduling any of its Indebtedness, (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such bankruptcy or insolvency laws, or (viii) take any action for the purpose of effecting any of the foregoing or which is indicative of insolvency;

 

(i)the sale is to a Customer located or incorporated (or other analogous term) outside the United States of America or Canada (but excluding the provinces of Newfoundland, the Northwest Territories and the Territory of Nunavit), unless the sale is on letter of credit, guarantee or acceptance terms, in each case acceptable to Agent in its Permitted Discretion;

 

(j)the sale to the Customer is on a bill-and-hold, guaranteed sale, sale-and- return, sale on approval, consignment or any other repurchase, return or contingent or conditional basis or is evidenced by chattel paper;

 

(k)the Customer is the United States of America, any state or any department, agency or instrumentality of any of them, unless such Borrower assigns its right to payment of such Account to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes or ordinances;

 

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(l)the goods giving rise to such Account have not been shipped and delivered to and accepted by the Customer or the services giving rise to such Account have not been performed by such Borrower and accepted by the Customer (such as advanced billings) or the Account otherwise does not represent a final sale that has been billed to the Customer;

 

(m)the Accounts of the Customer exceed a credit limit determined by Agent, in its Permitted Discretion, to the extent such Account exceeds such limit;

 

(n)the Account is subject to any offset, deduction, defense, dispute, or counterclaim, the Customer is also a creditor or supplier of such Borrower, or the Account is contingent in any respect or for any reason (each such offset, deduction, defense, dispute, counterclaim or contingency, a “Contra Claim”);

 

(o)such Borrower has made any agreement with any Customer for any deduction therefrom, except for discounts or allowances made in the ordinary course of business for prompt payment, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto;

 

(p)any return, rejection or repossession of the Inventory has occurred the sale of which gave rise to such Account or such Account relates to a Customer whose obligation to pay is in any respect, conditional or subject to any such right of return, rejection, repossession or similar rights;

 

 

(q)

such Account is not payable to such Borrower;

 

(r)in the case of any single Customer and its Affiliates, such Accounts constitute more than twenty (20%) percent of all Accounts (other than any Investment Grade Non- Automotive Retail Customer acceptable to Agent in its Permitted Discretion as to which the total obligations owing to such Borrower constitute more than (i) for the period from the Closing Date through and including September 30, 2020, fifty five (55%) percent of all Accounts, (ii) for the period from October 1, 2020 through and including November 30, 2020, fifty (50%) of all Accounts, and (iii) thereafter, forty-five (45%) percent of all Accounts); it being understood that the portion of the Accounts not in excess of foregoing applicable percentages may be deemed Eligible Accounts;

 

(s)such Account arises from a transaction wherein goods are placed on consignment, or which transaction includes progress billings (such that the obligation of the Customer with respect to such Account is conditioned upon such Borrower’s satisfactory completion of any further performance under the agreement giving rise thereto), arises from a guaranteed sale, a sale or return, a sale on approval, or a bill and hold, except as to bill and hold invoices, if Agent shall have received an agreement in writing from the Customer, in form and substance reasonably satisfactory to Agent, confirming the unconditional obligation of the Customer to take the goods related thereto and pay such invoice;

 

(t)the Customer or any officer or employee of the Customer with respect to such Account is an officer, employee, agent or other Affiliate of any Loan Party or any Subsidiary of any Loan Party;

 

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(u)there are proceedings or actions which are threatened or pending against the Customer with respect to such Account which might result in any Material Adverse Effect with respect to such Customer;

 

(v)the underlying sale and other documentation governing such Account do not provide that such Account must be paid by the Customer in Dollars;

 

(w)the underlying sale and other documentation governing such Account are not governed by the laws of the United States of America or, for Customers located or incorporated (or other analogous term) in Canada, the laws of the United States or Canada; or

 

(x)such Account is an Account the collection of which, Agent, in its Permitted Discretion, believes to be doubtful, including by reason of the Customer’s financial condition.

 

The criteria for Eligible Accounts set forth above may only be changed and any new criteria for Eligible Accounts may only be established by Agent in good faith, and upon prompt notice to Administrative Loan Party (which notice may be given either before or after such change is made), based on either: (i) an event, condition or other circumstance arising after the date hereof, or (ii) an event, condition or other circumstance existing on the date hereof to the extent Agent has no written notice thereof from such Borrower prior to the date hereof, in either case under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely affect the Accounts in the good faith determination of Agent. Any Accounts which are not Eligible Accounts shall nevertheless be part of the Collateral.

 

“Eligible Inventory” shall mean Inventory owned by a Borrower consisting of finished goods held for resale in the ordinary course of the business of such Borrower, in each case which Agent, in its Permitted Discretion, shall deem to be Eligible Inventory, based on such considerations as Agent may from time to time deem appropriate in its Permitted Discretion. Without limiting the foregoing, in no event shall Inventory be Eligible Inventory if such Inventory:

 

 

(a)

is Firearms or Ammunition;

 

 

(b)

is work-in-process or raw materials;

 

 

(c)

is spare parts for equipment;

 

 

(d)

is packaging and shipping materials;

 

 

(e)

is supplies used or consumed in such Borrower’s business;

 

(f)is a sample or otherwise used in marketing, or is a restrictive or custom item or otherwise is manufactured in accordance with customer-specific requirements;

 

(g)is subject to third party intellectual property, licensing or other proprietary rights, unless Agent is satisfied that such Inventory can be freely sold by Agent on and after the occurrence of an Event of a Default despite such third party rights;

 

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(h)is not in compliance with all standards of any Governmental Body applicable to the manufacture and sale thereof, or is not insured for the benefit of Agent in accordance with Section 4.10 hereof;

 

(i)is not located at premises owned and controlled by such Borrower; except, that, Inventory at premises leased and controlled by such Borrower or Inventory at a warehouse owned and operated by a third Person on behalf of such Borrower, in each case that otherwise satisfies the criteria for Eligible Inventory, may be considered Eligible Inventory if (A) Agent has received and accepted a Collateral Access Agreement from the owner and lessor or operator of such premises, as the case may be, duly authorized, executed and delivered by such owner and lessor or operator, it being understood and agreed that the Missouri Collateral Access Agreement is sufficient to satisfy this clause (A), and any Inventory located at the Missouri Location meets the eligibility criteria set forth in this clause (A), or (B) Agent shall have established such Reserves in respect of amounts at any time due or to become due to the owner and lessor or operator thereof as Agent shall determine in its Permitted Discretion;

 

(j)is not subject to the first priority, valid and perfected Lien of Agent (other than Permitted Encumbrances having priority by operation of law; but without limiting the right of Agent to establish any Reserves with respect to Permitted Encumbrances);

 

(k)is subject to any Lien other than the first priority security interest therein of Agent, except to the extent acceptable to Agent in its Permitted Discretion;

 

 

(l)

is not beneficially and legally owned solely by such Borrower;

 

 

(m)

is bill and hold goods;

 

 

(n)

is unserviceable, obsolete or slow-moving Inventory or Inventory in a poor

 

condition;

 

(o)

is damaged and/or defective Inventory;

 

 

(p)

is returned Inventory (other than undamaged and non-defective Inventory

 

returned in the ordinary course of business that is held for resale in the ordinary course of business);

 

 

(q)

is purchased, held or sold on consignment; or

 

 

(r)

is not subject to an appraisal in accordance with the requirements of Agent;

or

 

 

(s)

is located outside the continental United States of America.

 

The criteria for Eligible Inventory set forth above may only be changed and any new criteria for Eligible Inventory may only be established by Agent in good faith, and upon prompt notice to Administrative Loan Party (which notice may be given before or after such change is made), based on either: (i) an event, condition or other circumstance arising after the date hereof, or (ii) an event, condition or other circumstance existing on the date hereof to the extent Agent has no written notice thereof from Administrative Loan Party prior to the date hereof, in either case under

 

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clause (i) or (ii) which adversely affects or could reasonably be expected to adversely affect the Inventory in the good faith determination of Agent. Any Inventory which is not Eligible Inventory shall nevertheless be part of the Collateral.

“Environmental Complaint” shall have the meaning set forth in Section 4.18(d). “Environmental Laws” shall mean all federal, state, local and other environmental, land

use, zoning, health, chemical use, safety and sanitation laws, statutes, ordinances and codes relating to the protection of the environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances and the rules, regulations, policies, formal agency, interpretations, decisions, orders and directives of federal, state, local and other Governmental Body with respect thereto.

 

“Equipment” shall mean and include as to each Loan Party and each of its Subsidiaries, all of such Loan Party’s and Subsidiary’s, whether now owned or hereafter acquired and wherever located equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories, and all other goods (other than Inventory) and all replacements and substitutions therefor or accessions thereto.

 

“Equity Interests” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of such Person’s capital stock or partnership, limited liability company or other equity interests at any time outstanding, and any and all rights, warrants or options exchangeable for or convertible into such capital stock or other interests (but excluding any debt security that is exchangeable for or convertible into such capital stock or other equity interests).

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated thereunder.

 

“ERISA Affiliate” shall mean, with respect to any Loan Party, any trade or business (whether or not incorporated) that, together with such Loan Party, are treated as a single employer within the meaning of Sections 414(b), (c), (m) or (o) of the Code.

 

“ERISA Event” shall mean, with respect to any Loan Party or any ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a Title IV Plan; (b) the withdrawal of any Loan Party or ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any Loan Party or any ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to terminate a Title IV Plan or the treatment of a plan amendment as a termination under Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Loan Party or ERISA Affiliate to make when due required contributions to a Multiemployer Plan or Title IV Plan unless such failure is cured within thirty (30) days; (g) the imposition of a lien under Section 412 or 430 of the Code or Section 303 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate; (h) a Title IV Plan is in “at risk status” within the meaning of Code Section 430(i), (i) a Multiemployer Plan is in “endangered status” or “critical status” within the meaning of Code Section 432(b); (j) an ERISA Affiliate

 

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incurs a substantial cessation of operations within the meaning of ERISA Section 4062(e), with respect to a Title IV Plan; (k) any other event or condition that might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (l) the termination of a Multiemployer Plan under Section 4041A of ERISA or the reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245 of ERISA; or (m) the revocation or threatened revocation of a Qualified Plan’s qualification or tax exempt status; or (n) the termination of a Plan described in Section 4064 of ERISA.

“Erroneous Payment” shall have the meaning specified therefor in Section 16.22(a). “Erroneous Payment Deficiency Assignment” shall have the meaning specified therefor in

Section 16.22(d).

 

“Erroneous Payment Impacted Loans” shall have the meaning specified therefor in Section 16.22(d).

 

“Erroneous Payment Return Deficiency” shall have the meaning specified therefor in Section 16.22(d).

 

“ESOP” shall mean a Plan that is intended to satisfy the requirements of Section 4975(e)(7) of the Code.

“Event of Default” shall mean the occurrence of any of the events set forth in Section 10. “Excess Availability” shall mean the amount, as determined by Agent in its Permitted

Discretion, calculated at any date, equal to: (a) the lesser of: (i) the Borrowing Base and (ii) the Maximum Revolving Advance Amount less Maximum Revolving Advance Amount Reserves (in each case under (i) and (ii), without duplication and without giving effect to Reserves in respect of outstanding Letters of Credit), minus (b) the sum of: (i) the amount of all then outstanding and unpaid Revolving Advances plus the amount of all then outstanding Letters of Credit, plus (ii) the aggregate amount of all then outstanding and unpaid trade payables and other obligations of Loan Parties which are outstanding more than sixty (60) days past due as of the end of the immediately preceding month or at Agent’s option, as of a more recent date based on such reports as Agent may from time to time specify (other than trade payables or other obligations being contested or disputed by Loan Parties in good faith),

 

“Excluded Assets” shall mean:

 

 

(a)

any Excluded Equity Interests;

 

(b)each instrument, contract (including each Intellectual Property-related contract and any Accounts and other Receivables arising under such contract), chattel paper, license, permit, General Intangible, and other agreement that is with, or issued by, a Person that is not a Loan Party or Affiliate of any Loan Party, but only while, and only to the extent that, the grant of a security interest therein pursuant to this Agreement would result in a default or penalty under, or a breach or termination of, such instrument, contract, chattel paper, license, permit,

 

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General Intangible, or other agreement (any such provisions that would result in any of the foregoing being referred to herein as a “Restriction”; and any such asset or property, or interest thereon, that is at any time subject to a Restriction being referred to herein as a “Restricted Asset”), except, in each case, to the extent that, pursuant to the Code or other applicable law, the grant of a security interest therein can be made without resulting in a default or penalty thereunder or breach or termination thereof; provided, that, none of the foregoing assets and properties, or interests therein, shall constitute Excluded Assets if (i) the Restriction applicable thereto has been waived or such other Person has otherwise consented to the creation hereunder of a security interest in such Restricted Asset, or (ii) such Restriction would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of Article 9 of the UCC, as applicable, and as then in effect in any relevant jurisdiction, or any other applicable law (including the Bankruptcy Code) or principles of equity; provided further, that, (A) immediately upon the ineffectiveness, lapse or termination of any such Restriction with respect to a Restricted Asset (a “Non-Restricted Asset”), such Loan Party shall be deemed to have automatically, without further act by any Loan Party, Agent, Lenders or any other Person, granted a security interest in, all its rights, title and interests in and to such Non-Restricted Asset as if such Restriction had never been in effect; and (B) the foregoing exclusion shall in no way be construed so as to limit, impair or otherwise affect Agent’s unconditional continuing security interest in and to all rights, title and interests of such Loan Party in or to any payment obligations or other rights to receive monies due or to become due under any such Restricted Asset and in any such monies and other proceeds of such Restricted Asset; and

 

(c)applications for any trademarks that have been filed with the U.S. Patent and Trademark Office on the basis of an “intent-to-use” with respect to such marks, unless and until a statement of use or amendment to allege use is filed and accepted by the U.S. Patent and Trademark Office or any other filing is made or circumstances otherwise change so that the interests of a Loan Party in such marks is no longer on an “intent-to-use” basis, at which time such marks shall automatically and without further action by the parties be subject to the security interests and liens granted by a Loan Party to Agent hereunder.

 

“Excluded Equity Interests” shall mean voting Equity Interests issued by a Non-US Subsidiary that is a CFC representing in excess of sixty-six (66%) percent (or such greater percentage to the extent such greater percentage would not result in a material adverse tax consequence to Loan Parties under Treas. Reg. Section 1.956-2) of the voting Equity Interests of such Non-US Subsidiary.

 

“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the guaranty of such Loan Party of (including by virtue of the joint and several liability provisions of this Agreement), or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty of such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guaranty or security interest is or becomes illegal.

 

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“Excluded Tax” shall mean, with respect to any Lender (as defined in Section 3.6) (a) any Tax imposed on (or measured by) such Lender’s gross revenues or net income (however denominated) and any franchise tax (in each case imposed in lieu of a net income tax) by any jurisdiction (or any political subdivision thereof) under the laws of which the Lender is organized or in which its principal office or its applicable lending office is located, (b) any branch profits taxes imposed on the Lender by the United States or any similar tax imposed on the Lender by a jurisdiction in which the Lender is resident for tax purposes, and (c) ) any United States federal withholding taxes imposed under FATCA.

 

“Extraordinary Receipts” shall mean any cash received by any Loan Party or any of their respective Subsidiaries consisting of (a) proceeds of judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (b) indemnity payments (other than to the extent such indemnity payments are (i) immediately payable to a Person that is not a Loan Party or any of their respective Subsidiaries, or (ii) received by a Loan Party or any of their respective Subsidiaries as reimbursement for any payment previously made to such Person), (c) any purchase price adjustment (other than a working capital adjustment) received in connection with any purchase or other acquisition agreement, (d) tax refunds, (e) pension plan reversions, (f) proceeds of insurance (other than such proceeds described in Section 2.13(a)), (g) proceeds of Indebtedness for Money Borrowed incurred by Loan Parties after the date hereof, to the extent permitted hereunder, and (h) at any time that an Event of Default has occurred and is continuing, at the sole discretion of Agent, any other cash received by any Loan Party or any of their respective Subsidiaries not in the ordinary course of business (and not consisting of proceeds described in Section 2.13(a) of this Agreement).

 

“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), and (a) any current or future regulations or official interpretations thereof,

(b) any agreements entered into pursuant to Section 1471(b)(1) of the Code, and (c) any intergovernmental agreement entered into by the United States (or any fiscal or regulatory legislation, rules, or practices adopted pursuant to any such intergovernmental agreement entered into in connection therewith).

 

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.

 

“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upward to the nearest one one-hundredth of one (1/100th of 1%) equal to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, that, 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 quoted to Agent on such day on such transactions as determined by Agent in a commercially reasonable manner.

 

"Federal Reserve Bank of New York’s Website" shall have the meaning set forth in Section

3.9.

 

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“Fee Letter” shall mean the Fee Letter, dated as of the date hereof, by and among Borrowers and Agent, as amended, restated, modified and supplemented from time to time.

 

“Firearms” shall mean all firearms, guns and weapons, including, without limitation, handguns, revolvers, pistols, rifles, shotguns, semi-automatic weapons, submachine guns and any other portable barreled weapon that expels, is designed to expel or may be readily converted to expel a shot, bullet or projectile by the action of an explosive force.

 

“Fixed Charge Coverage Ratio” shall mean, with respect to Loan Parties and their Subsidiaries on a consolidated basis, for any applicable period, the ratio of (a) EBITDA for such period minus all cash Capital Expenditures made during such period minus all taxes paid or required to be paid during such period, to (b) Fixed Charges for such period.

 

“Fixed Charges” shall mean, as to Loan Parties and their Subsidiaries determined on a consolidated basis, with respect to any period, the sum of, without duplication, (a) all Cash Interest Expense during such period, plus (b) all regularly scheduled (as determined at the beginning of the respective period) principal payments of Money Borrowed, Indebtedness with respect to earn-outs and similar obligations and Indebtedness with respect to Capital Leases, in each case made or required to be made during such period (and without duplicating items in (a) and (b) of this definition, the interest component with respect to Indebtedness under Capital Leases), plus (c) all cash dividends or other cash distributions made or required to be made on account of Equity Interests (other than those made to a Loan Party) and all repurchases or redemptions of Equity Interests (other than those made to a Loan Party) made or required to be made during such period.

 

“Floor” shall mean a rate of interest equal to zero (0).

 

“GAAP” shall mean generally accepted accounting principles in the United States of America in effect from time to time, as may be amended from time to time by the Financial Accounting Standards Board; except, that, if there occurs after the date of this Agreement any change in GAAP that affects in any respect the calculation of any covenant contained in Section

6.8 hereof, Agent and Borrowers shall negotiate in good faith amendments to the provisions of this Agreement that relate to the calculation of such covenants with the intent of having the respective positions of Agent, Lenders and Borrowers, after such change in GAAP conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, the covenants in Section 6.8 hereof shall be calculated on the basis of such principles in effect prior to such change and consistent with those used in the preparation of the most recent audited financial statements delivered to Agent prior to the date of such change.

 

“General Intangibles” shall mean and include as to each Loan Party and each of its Subsidiaries, all of such Loan Party’s and Subsidiary’s general intangibles (as such term is defined in the UCC), whether now owned or hereafter acquired including, without limitation, all payment intangibles, choses in action, commercial tort claims, causes of action, corporate or other business records, inventions, designs, patents, patent applications, equipment formulations, manufacturing procedures, quality control procedures, trademarks, service marks, trade secrets, goodwill, copyrights, design rights, registrations, licenses, franchises, customer lists, tax refunds, tax refund claims, computer programs and computer software, all claims under guaranties, Liens or other

 

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security held by or granted to such Loan Party or Subsidiary to secure payment of any of the Receivables by a Customer, all rights of indemnification and all other intangible property of every kind and nature (other than Receivables).

 

“Governmental Body” shall mean any nation or government, any state or other political subdivision thereof or any entity exercising the legislative, judicial, regulatory or administrative functions of or pertaining to a government.

 

“Government Receivables” shall have the meaning set forth in Section 6.4.

 

“Guarantee” shall mean the guarantee set forth in Section 15 of this Agreement and any other guarantee of the Obligations of Borrowers now or hereafter executed by a Guarantor in favor of Agent for its benefit and for the ratable benefit of Lenders.

 

“Guarantor” or “Guarantors” shall have the meaning set forth in the preamble to this Agreement and shall extend to all permitted successors and assigns of such Persons as well as each other Subsidiary of Parent and Borrowers that becomes a guarantor of any of the Obligations after the Closing Date pursuant to Section 7.12(a) or otherwise.

 

“Hazardous Discharge” shall have the meaning set forth in Section 4.18(d).

 

“Hazardous Substance” shall mean, without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or related materials as defined in CERCLA, the Hazardous Substances Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA, Articles 15 and 27 of the New York State Environmental Conservation Law or any other applicable Environmental Law and in the regulations adopted pursuant thereto.

 

“Hazardous Wastes” shall mean all waste materials subject to regulation under CERCLA, RCRA or applicable state or other law, and any other applicable federal, state or other laws now in force or hereafter enacted relating to hazardous waste disposal.

 

“Hedging Agreements” shall mean an agreement between any Loan Party and any financial institution that is a rate swap agreement, basis swap, forward rate agreement, commodity swap, interest rate option, forward foreign exchange agreement, spot foreign exchange agreement, rate cap agreement rate, floor agreement, rate collar agreement, currency swap agreement, cross- currency rate swap agreement, currency option, any other similar agreement (including any option to enter into any of the foregoing or a master agreement for any of the foregoing together with all supplements thereto) for the purpose of protecting against fluctuations in or managing exposure with respect to interest or exchange rates, currency valuations or commodity prices.

 

"Hedging Obligations" shall mean obligations of any Loan Party to Agent or any Affiliate Counterparty under any interest rate swap transactions, basis swaps, forward rate transactions, commodity swaps, commodity options, equity or equity index swaps, equity or equity index options, bond options, interest rate options, foreign exchange transactions, cap transactions,

 

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floor transactions, collar transactions, forward transactions, currency swap transactions, cross- currency rate swap transactions, currency options

 

“Impacted Lender” shall mean any Lender that (a) is an Impaired Lender or (b) fails to promptly provide Agent, upon Agent’s written request, reasonably satisfactory assurance that such Lender is not, and will not become, a Defaulting Lender or an Impaired Lender.

 

“Impaired Lender” shall mean any Lender (a) that has given verbal or written notice (and so long as such notice has not been retracted in writing) to any Borrower, Agent or any other Lender or has otherwise publicly announced (and such announcement has not been retracted in writing) that such Lender believes it will fail to fund all payments required to be made by it or fund all purchases of participations required to be funded by it under this Agreement and the Other Documents, (b) as to which Agent has (and for so long as Agent continues to have) a good faith belief that such Lender has defaulted in fulfilling its obligations (as a lender, agent or letter of credit issuer) under one or more other syndicated credit facilities or (c) with respect to which one or more Lender-Related Distress Events has occurred and are continuing with respect to such Person or any Person that directly or indirectly controls such Lender and Agent has determined that such Lender may become a Defaulting Lender. For purposes of this definition, control of a Person shall have the same meaning as provided in the definition of Affiliate.

 

“Indebtedness” of a Person at a particular date shall mean (a) all indebtedness for Money Borrowed of such Person whether direct or guaranteed; (b) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP consistently applied; (c) notes payable and drafts accepted representing extensions of credit; (d) any obligation owed for all or any part of the deferred purchase price of property or services if the purchase price is due more than six (6) months from the date the obligation is incurred or is evidenced by a note or similar written instrument (including, without limitation, the maximum potential amount of all earn-outs and similar deferred payment obligations regardless of the length of deferral); (e) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is non-recourse to the credit of that Person; (f) any contractual obligation, contingent or otherwise, of such Person to pay or be liable for the payment of any indebtedness described in this definition of another Person, including, without limitation, any such indebtedness, directly or indirectly guaranteed, or any agreement to purchase, repurchase, or otherwise acquire such indebtedness, obligation or liability or any security therefor, or to provide funds for the payment or discharge thereof, or to maintain solvency, assets, level of income, or other financial condition; (g) all obligations evidenced by bonds, debentures, notes or similar instruments; (h) all reimbursement obligations and other liabilities of such Person with respect to surety bonds (whether bid, performance or otherwise), letters of credit, banker’s acceptances, drafts or similar documents or instruments issued for such Person’s account; (i) all obligations, liabilities and indebtedness of such Person (marked to market) arising under Hedging Agreements;

(j) any guaranty, endorsement, suretyship or other undertaking pursuant to which such Person may be liable on account of any obligation of any third party; (k) the indebtedness of a partnership or joint venture for which such Person is liable as a general partner or joint venture; (l) any Disqualified Equity Interest of such Person; and (m) the principal and interest portions of all rental obligations of such Person under any synthetic lease or similar off-balance sheet financing where such transaction is considered to be borrowed money for tax purposes but is classified as an

 

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operating lease in accordance with GAAP consistently applied, in each case whether such liabilities are present or future, actual or contingent and whether owned jointly or severally.

 

“Intellectual Property” shall mean all trade secrets and other proprietary information; trademarks, service marks, business names, Internet domain names, designs, logos, trade dress, slogans, indicia and other source and/or business identifiers, and the goodwill of the business relating thereto and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights (including copyrights for computer programs and software) and copyright registrations or applications for registrations which have heretofore been or may hereafter be issued throughout the world and all tangible property embodying the copyrights; unpatented inventions (whether or not patentable); patent applications and patents; industrial designs, industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or disks, flow diagrams, specification sheets, source codes, object codes and other physical manifestations, embodiments or incorporations of any of the foregoing; the right to sue for all infringements of any of the foregoing; and all common law and other rights throughout the world in and to all of the foregoing.

 

“Interest Expense” shall mean, for any period, as to any Person, as determined in accordance with GAAP consistently applied, the total interest expense of such Person, whether paid or accrued during such period but without duplication (including the interest component of Capital Leases for such period).

 

“Interest Period” shall mean the period provided for any LIBOR Rate Loan pursuant to Section 2.2(b).as to any SOFR Loan, a period of one month, three months or six months (in each case, subject to the availability thereof), as selected by Administrative Loan Party pursuant to the terms of this Agreement (including continuations and conversions thereof); provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) if any Interest Period would end on a day for which there is no numerically corresponding day in the calendar month, such Interest Period shall end on the last Business Day of the relevant calendar month, (iii) no Interest Period shall extend beyond the Revolving Credit Maturity Date and (iv) no tenor that has been removed from this definition pursuant to Section 3.9(d) shall be available for specification in such Advance Request. For purposes hereof, the date of a Loan initially shall be the date on which such Loan is made and thereafter shall be the effective date of the most recent conversion or continuation of such Loan.

 

“Interest Rate” shall mean an interest rate per annum equal to (a) the sum of the Base Rate plus the Applicable Margin per annum with respect to Base Rate Loans, and (b) the sum of Adjusted LIBORthe SOFR Rate plus the Applicable Margin per annum with respect to LIBOR RateSOFR Loans.

 

“Inventory” shall mean and include as to each Loan Party and each Subsidiary of each Loan Party, all of such Loan Party’s and Subsidiary’s now owned or hereafter acquired inventory (as such term is defined in the UCC), goods, merchandise and other personal property, wherever located, to be furnished under any contract of service or held for sale or lease, all raw materials,

 

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work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in such Loan Party’s or Subsidiary’s business or used in selling or furnishing such goods, merchandise and other personal property, all other inventory of such Loan Party or Subsidiary, and all documents of title or other documents representing them.

 

“Investment-Grade” shall mean a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- BBB shall mean(or the equivalent) by S&P, or any equivalent rating by any other nationally recognized rating agency.

 

“Investment Grade Automotive Retail Customers” shall mean any Customer in the retail automotive industry that has an Investment Grade rating as determined by Agent in its Permitted Discretion.

 

“Investment Grade Non-Automotive Retail Customers” shall mean any Customer not in the automotive industry that has an Investment Grade rating as determined by Agent in its Permitted discretion.

 

“Investment Property” shall mean any “investment property” as such term is defined in Section 9-102 of the UCC now owned or hereafter acquired by any Loan Party or any of its Subsidiaries, wherever located, including (a) all securities, whether certificated or uncertificated, including stocks, bonds, interests in limited liability companies, partnership interests, treasuries, certificates of deposit, and mutual fund shares; (b) all securities entitlements of any Loan Party or Subsidiary, including the rights of any Loan Party or Subsidiary to any securities account and the financial assets held by a securities intermediary in such securities account and any free credit balance or other money owing by any securities intermediary with respect to that account; (c) all securities accounts of any Loan Party or Subsidiary; (d) all commodity contracts of any Loan Party or Subsidiary; and (e) all commodity accounts held by any Loan Party or Subsidiary.

 

“IRS” shall mean the United States Internal Revenue Service.

 

“Issuer” shall mean any Person who issues a Letter of Credit and/or accepts a draft pursuant to the terms thereof (it being agreed that so long as TD Bank shall be Agent, then the Issuer shall be (a) TD Bank or any of its Affiliates, and/or (b) such other Person selected by Agent in its Permitted Discretion and in consultation with Administrative Loan Party; provided, however, that, in the event that TD Bank is neither Agent nor a Lender, the “Issuer” with respect to all subsequently issued Letters of Credit shall be a Person selected by Borrowers and acceptable to the Required Lenders, Agent and such Person).

 

“Judgment Currency” shall have the meaning set forth in Section 16.5.

 

“Lender” and “Lenders” shall have the meaning ascribed to such term in the preamble to this Agreement and shall include each Person which becomes a transferee, successor or assign of any Lender.

 

“Lender Default” shall have the meaning set forth in Section 2.15(a).

 

“Lender-Related Distress Event” shall mean, with respect to any Lender or any Person that directly or indirectly controls such Lender (each a “Distressed Person”), a voluntary or involuntary

 

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case with respect to such Distressed Person under the Bankruptcy Code or any similar bankruptcy or insolvency laws of its jurisdiction of formation, or a custodian, conservator, receiver or similar official is appointed for such Distressed Person or any substantial party of such Distressed Person’s assets, or the assets or management of such Distressed Person have been taken over by any Governmental Body including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or such Distressed Person becomes the subject of a Bail-in Action, or such Distressed Person or any Person that directly or indirectly controls such Distressed Person is subject to a forced liquidation, merger, sale or other change of control supported in whole or in party by guaranties or other support (including, without limitation, the nationalization or assumption of ownership or operating control by) of the U.S. government or other Governmental Body, or such Distressed Person makes a general assignment for the benefit of creditors or is otherwise adjudicated as, or determined by any Governmental Body having regulatory authority over such Distressed Person or its assets to be, insolvent, bankrupt, or deficient in meeting any capital adequacy or liquidity standard of any such Governmental Body. For purposes of this definition, control of a Person shall have the same meaning as provided in the definition of Affiliate.

 

“Letter of Credit Application” shall have the meaning set forth in Section 2.9(a). “Letter of Credit Fees” shall have the meaning set forth in Section 3.2(a). “Letters of Credit” shall have the meaning set forth in Section 2.8.

“LIBOR” (i.e., the London Interbank Offered Rate) shall mean the London Interbank Offered Rate rate of interest in U.S. Dollars (rounded upwards, at the Lender’s option, to the next 1/8th of one percent) equal to the Intercontinental Exchange, Inc. (“ICE, “or the successor thereto if ICE is no longer making a London Interbank Offered Rate available) (“ICE LIBOR”) rate for the equivalent Interest Period as published by Bloomberg (or such other commercially available source providing quotations of ICE LIBOR as designated by Lender from time to time) at approximately 11:00 A.M. (London time) two (2) London Business Days prior to the commencement of any Interest Period; provided, however, if more than one ICE LIBOR is specified, the applicable rate shall be the arithmetic mean of all such rates; provided, however, notwithstanding anything else to the contrary in this Loan Agreement, LIBOR will at no time be less than 0% per annum.

 

“LIBOR Rate Loan” shall mean an Advance accruing interest based on a rate determined by reference to the Adjusted LIBOR Rate.

 

“LIBOR Reserve Percentage” shall mean, or any day, that percentage (expressed as a decimal) which is in effect from time to time under Regulation D, as such regulation may be amended from time to time or any successor regulation, as the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or marginal reserves) applicable with respect to Eurocurrency liabilities as that term is defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of LIBOR Rate Loans is determined), whether or not Lender has any Eurocurrency liabilities subject to such reserve requirement at that time. LIBOR Rate Loans shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without

 

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benefits of credits for proration, exceptions or offsets that may be available from time to time to Lender. The Adjusted LIBOR Rate shall be adjusted automatically on and as of the effective date of any change in the LIBOR Reserve Percentage.

 

“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever including, without limitation, any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the UCC or comparable law of any jurisdiction. Any reference to the Lien of Agent shall be construed in the broadest sense possible and shall in each case include a security interest and other Lien as the context implies.

 

“Lien Release and Assignment of Proceeds Agreement” shall mean a Lien Release and Assignment of Proceeds Agreement, in form and substance satisfactory to Agent, either entered into or assumed after the date of this Agreement by and among a Receivable Purchaser, Agent and any Loan Party, providing for, inter alia, an acknowledgment by the Agent that the Obligations are not secured by a lien and security interest in any accounts receivable of such Loan Party sold to such Receivable Purchaser under any Receivable Financing Agreement, as amended from time to time.

 

“Line Cap” shall mean, at any time, the lesser of (a) the Revolving Commitments of all Lenders at such time, and (b) the Borrowing Base at such time.

 

“Loan Party” shall mean, individually, each Borrower and each Guarantor, and “Loan Parties” shall mean, collectively, Borrowers and the Guarantors.

 

“Loans” shall mean, collectively, the unpaid balance of Advances which may be Base Rate Loans or SOFR Loans and any unreimbursed draws under any Letter of Credit.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the financial condition, operations, assets or business of the Borrowers taken as a whole and/or Loan Parties and their Subsidiaries taken as a whole, (b) any Loan Party’s ability to pay the Obligations or to comply with this Agreement or any Other Document in accordance with the terms hereof or thereof, (c) the value of any material portion of the Collateral, or Agent’s Liens on the Collateral or the priority of any such Lien or (d) Agent’s ability to realize on any material portion of the Collateral or otherwise enforce any of the material terms of this Agreement or any of the Other Documents, including on the validity, enforceability, or binding effect thereof. Notwithstanding that a particular event or condition may not itself constitute a Material Adverse Effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of one or more events or conditions gives rise to a material adverse effect with respect to one or more of the foregoing clauses (a) through (d).

 

“Material Contracts” shall have the meaning set forth in Section 5.21.

 

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“Maximum Credit” shall mean $50,000,00075,000,000 (subject to adjustment as provided pursuant to the terms of Section 2.19).

 

“Maximum Credit Increase Effective Date” shall have the meaning set forth in Section 2.19(c).

 

“Maximum Revolving Advance Amount” shall mean $50,000,00075,000,000, as the same may be reduced or increased from time to time in accordance with this Agreement (including, without limitation, pursuant to any increase contemplated under Section 2.19).

 

“Maximum Revolving Advance Amount Reserves” shall mean Reserves to the extent that such Reserves are in respect of amounts that may be payable to third parties and for which Agent elects from time to time in its Permitted Discretion to institute such Reserves against the Maximum Credit in addition to instituting such Reserves against the Borrowing Base.

“Maximum Swingline Loan Advance Amount” shall mean $10,000,00015,000,000. “Missouri Collateral Access Agreement” shall mean that certain Landlord Waiver dated

on or about the date hereof by and between Smith and Wesson Sales Company and Agent with resepect to the Missouri Location.

 

“Missouri Location” shall mean the premises leased by Parent at 1800 North Route Z, Columbia, Missouri, Boone County 65202.

 

“Money Borrowed” shall mean (a) Indebtedness for borrowed money arising from the lending of money by any Person to any Loan Party or any of their respective Subsidiaries, (b) Indebtedness, whether or not in any such case arising from the lending by any Person of money to any Loan Party or any of their respective Subsidiaries, (i) which is represented by notes payable or drafts accepted that evidence extensions of credit, (ii) which constitutes obligations evidenced by bonds, debentures, notes or similar instruments, or (iii) upon which interest charges are customarily paid (other than accounts payable) or that was issued or assumed as full or partial payment for property, (c) reimbursement obligations with respect to letters of credit or guaranties of letters of credit, and (d) Indebtedness of any Loan Party or any of their respective Subsidiaries under any guarantee of obligations that would constitute Indebtedness for Money Borrowed under clauses (a), (b) or (c) hereof, if owed directly by any Loan Party or any of their respective Subsidiaries.

 

“Mortgage” shall mean each of the mortgages, deeds of trust, leasehold mortgages, leasehold deeds of trust, collateral assignments of leases or other real estate security documents delivered by any Loan Party to Agent on behalf of itself and Lenders with respect to the Real Property, all in form and substance reasonably satisfactory to Agent.

 

“Mortgaged Real Property” shall mean the Real Property of Loan Parties that is subject to a Mortgage.

 

“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Sections 3(37) and 4001(a)(3) of ERISA.

 

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“Net Income” shall mean, for any period, the aggregate income (or loss) of Loan Parties and their Subsidiaries for such period, all computed and calculated in accordance with GAAP consistently applied on a consolidated basis.

 

“Net Liquidation Percentage” shall mean the percentage of the book value of Eligible Inventory that is estimated to be recoverable in an orderly liquidation of such Eligible Inventory, net of all associated costs and expenses of such liquidation, such percentage to be as determined from time to time by the most recent appraisal received by Agent, which appraisal shall (a) be reasonably satisfactory to Agent, (b) prepared by an appraisal company reasonably acceptable to Agent and (c) expressly provide that Agent is permitted to rely thereon.

 

“Non-Restricted Asset” shall have the meaning as set forth in the definition of Excluded

 

Assets.

“Non-US Loan Party” shall mean a Loan Party other than a US Loan Party. “Non-US Subsidiary” shall mean any Subsidiary other than a US Subsidiary.

“Note” or “Notes” shall mean, individually or collectively, the Revolving Credit Notes and

 

the Swingline Loan Note.

 

“Notice of Conversion” shall mean a notice duly executed by a Responsible Officer of Administrative Loan Party appropriately completed and in substantially the form of Exhibit B.

 

“Obligations” shall mean and include (a) any and all of each Loan Party’s Indebtedness and/or liabilities pursuant to or evidenced by this Agreement or any Other Documents to Agent, Lenders or any Issuer of every kind, nature and description, direct or indirect, secured or unsecured, joint, several, joint and several, absolute or contingent, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, regardless of how such indebtedness or liabilities arise (including all interest accruing after the commencement of any bankruptcy or similar proceeding whether or not enforceable in such proceeding) and all obligations of any Loan Party to Agent, Lenders or any Issuer to perform acts or refrain from taking any action under this Agreement or any Other Documents, (b) any and all of each Loan Party’s Indebtedness and/or liabilities owing to TD Bank and/or any Affiliate Counterparty or any other Affiliate of TD Bank (including Swap Obligations)  not otherwise set forth in clause (a) and

(c) of this definition of Obligations, and (c) Bank Product Obligations solely for purposes of (x) Section 4.1 (and other Lien grants made by Loan Parties in the Other Documents to secure any and all of the Obligations) and (y) defining “Senior Indebtedness,” “First Lien Indebtedness” or words of similar meaning in any subordination agreement or intercreditor agreement, in each case subject to the priority in right of payment set forth in Section 11.2; provided, that, as to any such Bank Product Obligations, the same shall only be included within the Obligations if (i) the applicable Bank Product Provider, other than TD Bank and its Affiliates, and the applicable Loan Party shall have delivered prompt written notice to Agent (but in no event later than ten (10) Business Days) that (A) such Bank Product Provider has entered into a transaction to provide Bank Products to such Loan Party, (B) the maximum dollar amount of Obligations arising thereunder to be included as a Reserve (the “Bank Product Amount”), together with the methodology used by such parties in determining the Bank Product Amount, subject in all events, however, to Agent’s

 

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right, in its Permitted Discretion, to establish such Reserve as Agent shall at any time determine is appropriate to reflect the reasonably anticipated liabilities and obligations of Loan Parties with respect to such Bank Product then provided or outstanding, and (C) the express agreement of such Bank Product Provider and such Borrower or such other Loan Party that the Bank Product Obligations arising pursuant to such Bank Products provided to such Borrower or such other Loan Party constitute Obligations entitled to the benefits of the Liens of Agent granted hereunder, and Agent shall have accepted such notice in writing, (ii) in no event shall any Bank Product Provider acting in such capacity to whom such Bank Product Obligations are owing be deemed a Lender for purposes hereof except with respect to the Lien granted in favor of Agent, for itself and on behalf of each Secured Party, and in no event shall the approval of any such Person in its capacity as Bank Product Provider be required in connection with the release or termination of any security interest or other Lien of Agent or with respect to any other matter governed by this Agreement or any Other Document, and (iii) Agent may terminate this Agreement and the Other Documents, along with any Liens granted under this Agreement and the Other Documents, without any notice to or consent by any Bank Product Provider, in its capacity as such, regardless of whether or not any Bank Product Obligations are outstanding. The Bank Product Amount may be changed from time to time upon written notice to Agent by a Ba